FROM IDEA TO DOORSTEP 2019 · From initial interest through purchase and beyond, organizations need to manage many complex, interdependent and moving parts. While the thought may

FROM IDEA TO DOORSTEP 2019:Everything you need to know to achieve digital commerce success

+ SPOTLIGHT ON DATA

INTRODUCTION 4

THE FOUNDATION 6People, Technology and Innovation 8

MERCHANDISING 11Product Assortment Management 13

Product Content Management 13

Advanced Analytics Platforms 14

Catalog Management / Taxonomy 15

Searchandising 16

Recommendations 17

Gifting 18

Price Optimization 19

PLANNING AND SOURCING 20Enterprise Resource Planning (ERP) 21

Inventory/Merchandise Planning 22

VMI (Vendor Managed Inventory) 24

Demand planning 25

CONTENT 27Personalization 29

Photography/Video 30

Lifestyle/Editorial 32

Content Management 33

Product Information Management (PIM) 33

Asset Management 33

User-Generated Content 34

Influence the Influencers 34

Augmented Reality and 3D Visualization 35

USER EXPERIENCE 37Creative/Design – Form Follows Function 39

The Need for Speed 39

Usability 40

Site Search/Navigation 41

Ratings and Reviews 42

Personalization 42

MARKETING ACQUISITION 45Search Engine Optimization (SEO) 47

Paid Search 49

Mobile Marketing 52

MARKETING RETENTION 57Email Marketing 59

CRM 61

Loyalty Programs 62

SELLING 66Ecommerce/Digital Commerce Platforms 68

MARKETPLACES 78Amazon 81

Global 82

Retailer-Operated Marketplaces 82

Niche/Vertical Marketplaces 83

ORDER MANAGEMENT 87Online Order Management 89

Omnichannel Order Management 90

What to look for in an OMS 91

PAYMENTS 97Payment Gateways 99

Mobile Payments 99

Pay Later 101

Loyalty and Marketing 101

IN-STORE 103Point-of-Sale Solutions (POS) 106

Customer Relationship Management (CRM) 107

Sales Enablement/Clienteling 108

Mobile (Shoppers) 109

Interactive Store Signage, Mirrors, Augmented/

Virtual Reality 111

FULFILLMENT 114Warehouse Management 115

Shipping 116

Logistics 119

Returns Management 121

CUSTOMER SERVICE 124Call Centers 127

Self-Service Help 127

Online/Live Chat 128

AI and Chatbots 128

Social Media and Messaging Channels 129

ANALYTICS/REPORTING 131Customer Relationship Management (CRM) 134

Campaign and Marketing Management 134

Business Intelligence (BI) 135

Big Data: AI to the rescue 135

Web Analytics 136

Attribution 136

CONCLUSION: COMING FULL CIRCLE 138

REFERENCES 140

Introduction–

Shopper sophistication and rapidly-developing digital technologies

are forcing retailers and brands to constantly evaluate and adjust

how they reach, interact with, and sell to their customers.

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Introduction | 5 © 2019

Digital shopping has fast become a way of life for

today’s shoppers, demanding simple and easy ways to

discover, evaluate and buy. In order to stay competitive,

retailers and brands must offer seamless, easy and

quick ways to shop and transact. For many retailers, that

means embracing digital channels, prioritizing a unified

commerce approach and leveraging data to deliver

optimal shopping experiences. While the importance

of digital commerce continues to rise, brick and mortar

retail is not dead - but traditional retail as we once knew

it no longer exists. Improved use of data and a greater

focus on connecting and blending in-store and digital

experiences should be front and center.

FROM IDEA TO DOORSTEP

What does it take to run a successful business? From

developing the right strategy and building a high-

performing team, to building a solid foundation and

selecting the right technologies, there are many different

moving parts to manage. Top that off with a constantly

evolving retail environment and technology moving at

the speed of light, and it is no wonder that thriving, yet

alone surviving, can be overwhelming – even for the

most seasoned executives.

In this report, we identify key areas along the

FitForCommerce “From Idea to Doorstep” continuum

which brands, retailers, manufacturers and distributors

must master to succeed. We examine proven strategies

and tactics and provide an overview of the technologies

needed to support each area.

* Going forward, in this report, we will use the term “retailer” to cover both brands and retailers.

DID YOU KNOW?

Global ecommerce sales neared $3 trillion in 2018, increasing online’s share of total retail sales to north of 15 percent.1

HEARD IN THE FIELD

“Things are changing so fast in retail that a year needs to be measured in dog years.” Mark Cohen, Head of Retail Studies Program, Columbia Business School

SPOTLIGHT ON DATA

Data data data… we all know the importance of it, but many retailers and brands still struggle with how to effectively leverage data. As the industry evolves and competition increases, data becomes one the most critical items in the retailer’s toolbox. But why is data so critical? Are you gathering the right data? Do you have the right tools and people in place to make the most of your data? These are some of the questions we will tackle in this year’s Spotlight On section in each chapter of this report.

Shoppers don’t think in terms of “channels.” They simply want an engaging experience that is relevant, fast and

convenient. The organizations that win in today’s marketplace take measures to deliver a seamless experience,

start to finish, within and across channels, supporting shopper needs wherever, however and whenever they shop.

The Foundation–

Evolving technologies and changing shopping behaviors are

consistently top of mind for retailers. And while all agree that a

seamless and consistent shopping experience across all channels

is ideal, the approach varies.

The Foundation | 7 © 2019

Idea to Doorstep: Process and Technologies

CONTENT

Content Mgmt.

Photography/Video

Lifestyle/Editorial

Product Info Mgmt.

Asset Mgmt.

Personalization

SELLING

Ecommerce Platforms

Mobile Commerce

Print Catalogs

Global

Hosting/Performance

MARKETPLACES

Amazon

Global

Retailer

Niche/Vertical

IN-STORE

POS

Mobile

Sales enablement –endless aisle,

clienteling

Interactive signage, mirrors etc.

FULFILLMENT

Warehouse Mgmt.

Shipping

Logistics

Global

Returns

PLANNING/SOURCING

Supply Chain

ERP

Inventory planning

Wholesale

MARKETINGACQUISITION

PPC

SEO

Display/Retargeting

Social

Promotions

Mobile

MARKETINGRETENTION

Email

CRM

Loyalty

Personalization

ORDER MANAGEMENT

Online

Omnichannel

Global

PAYMENTS

Payment systems

Mobile payments

Global payments

Fraud prevention

CUSTOMER SERVICE

Call/Contact center

Online/Live chat

Social

Customer Satisfaction

ANALYTICS &REPORTING

Attribution

Reporting

Business Intelligence

Big Data

PEOPLE PROCESS TECHNOLOGY INNOVATION

PRODUCTIDEA

DOORSTEP

USEREXPERIENCE

UX/Usability

Creative/Design

Cross-ChannelExperience

Site search/Navigation

Reviews and Ratings

Personalization

MERCHANDISING

Product Assortment

Product Content

Catalog Mgmt./Taxonomy

Searchandising

Recommendations

Gifting

Price Optimization


BURNING QUESTIONS

• What do I need to set up my organization for success?

• How do I determine the right technology mix for my organization?

• How do I balance managing daily operations and innovation?

Legacy systems, siloed organizational structures and inadequate customer data are just some of the barriers

that retailers face today. Many struggle with selecting the right tools and integrating systems across all

customer touchpoints which is so critical to truly unifying the customer experience.

From initial interest through purchase and beyond, organizations need to manage many complex,

interdependent and moving parts. While the thought may be daunting, approaching the shopping

experience in a strategic, holistic manner is the only way to satisfy exceedingly high expectations. It begins

with an internal foundation built on the right organizational structure, processes and supported by the

technology needed to power it all.

PEOPLE, TECHNOLOGY AND INNOVATION

A solid digital commerce strategy encompasses many components and requires constant refinement. The

strategy must define the goals, provide a roadmap for moving forward, and allow organizations to keep up

with competition. Organizations not only must build a solid foundation; they must position themselves to

handle the many unknowns of the future.

People

An organizational structure of cross-functional

teams with the right skills, and shared values

and goals that work collaboratively, and in

alignment, to plan, manage and execute all

functions is essential to running a successful

retail business.

Too often organizations employ people to

manage each distinct business area, leading

to functional silos. This frequently leads to

OUR TAKE: People are your greatest innovation

The right people represent the most valuable asset for

your organization. Ensure that you give them the tools

to develop their skills and the technology to empower

them to collaborate and best serve your customers.


communication breakdowns, inefficiencies and

missed opportunities. By breaking down the

barriers, organizations are better positioned

to deliver the standout customer experiences

necessary to compete.

The way that retailers develop, staff, incent and

evaluate their people can mean all the difference

between failure and success. It is critical to ensure

that employee performance measurements,

incentives, and rewards are structured to foster

alignment in achieving strategic company objectives

versus tactical goals.

Technology

The right technology stack forms a critical foundation for success – it must support and empower teams

to achieve operational efficiencies and deliver optimal customer experiences. Finding the best digital

commerce technology solutions requires careful considerations. It starts with a clear understanding of

desired achievements, current system capabilities and future goals. A detailed requirements analysis often

leads to the identification of gaps and opportunities that may not have been apparent.

It is easy to get distracted by shiny new technologies, but it is often the less “flashy” solutions that help

optimize and improve the overall efficiency of a business. It is worth evaluating how and what can be

improved “behind-the-scenes” before determining what technologies are needed.

GETTING STARTED

You have a lot of technologies at your disposal – and all promise to deliver the optimal tools to accelerate

your business. Most technology platforms require resources and have a learning curve, so it is critical to

determine the right priorities for your organization.

OUR TAKE: It’s all about the common goal

Remember that your customer has a relationship

with your brand, not a series of channels and

departments. Design your organizational

structure, goals, performance measurements,

metrics and rewards to achieve strategic ‘above

the channel’ objectives. This ensures a world-class

customer experience and long-term customer

value.

OUR TAKE: 66 percent of digital commerce selections end in divorce

Choosing the right platform or solution to meet identified requirements is a time-consuming and resource-

intensive – but necessary – project. Investing in, and implementing, the wrong solution can have a detrimental

impact on your overall business.


1. Comparison-shop the competition and beyond. Look to

broader industry best practices for opportunities that

readily transfer to your business model

2. Evaluate your current capabilities to identify gaps and

opportunities

3. Evaluate the likely ROI of addressing these gaps

4. Establish implementation priorities and a testing strategy

5. Establish cross-functional (and cross-channel) collaboration to break down silos and assure seamless

execution

6. Establish measurement methodology

7. Test, roll-out successes, and test some more

Innovation

Digital commerce technologies evolve at lightning speed. It takes both time and resources to keep up with

the latest and greatest – both of which are scarce for most retailers and brands. It is imperative to constantly

understand customer shopping behaviors and expectations as well as monitor what competitors are doing

and even look beyond specific industry characteristics to get inspiration and gain a sneak peek into what

might be next.

Most organizations are inundated with promises from technology providers to take their businesses to the

next level, but it is almost impossible to separate the wheat from the chaff. Retailers need an organized

approach to staying on top of innovations while navigating which emerging technologies will truly help the

bottom line. Few have the capacity to dedicate resources to innovation. Those who do not should consider

teaming up with a partner that understands their business and can apply market knowledge and insights on

innovative tools and technologies best suited to improve efficiencies and grow their business.

DID YOU KNOW?

Following implementation, retailers

typically utilize only 25-35 percent

of a system’s functionality.2

OUR TAKE: Integration is King

As you add new sales channels and more sophisticated processes, avoid ending up with a number of stand-

alone applications that each handles short-term, tactical needs. Disconnected systems cause functional silos

and create process bottlenecks, not to mention a data nightmare. Thoughtful integration avoids that.

Merchandising–

What are we going to sell? That is the first merchandising question

that all organizations must answer. From this flows a series of other

critical questions, including how the products will be sold, where

they will be sold and at what price.

Merchandising | 12 © 2019

BURNING QUESTIONS

• What tools do I need to optimize merchandising in my organization?

• How do I develop a differentiated merchandising strategy?

• How can data help inform my merchandising strategy?

In a world of endless aisles, marketplaces, nimble competition, and paid search, digital merchandising

presents a unique set of challenges and opportunities. Organizations need to ask the following questions:

• How do we make our products and assortments stand apart?

• How do we make it as easy as possible for customers to find what they are looking for?

• How do we determine the right price to keep product selling and maintain profitability?

Today’s merchandising tools and platforms are

supported by the power of data and machine learning,

making it easier than ever before to yield valuable

insights into customer behaviors. With these modern

solutions come the opportunity, and increasingly the

obligation, to make data-driven decisions faster and in

a more personalized manner.

TOOLS AND TRICKS OF THE TRADE

Every successful merchandising strategy is supported

by technology solutions to enable the merchandising

team to execute in the most efficient way possible. It is

MERCHANDISING TOOLS

1. Product Assortment Management

2. Product Content Management

3. Advanced Analytics Platforms

4. Searchandising

5. Product Recommendations

6. E-Gifting

7. Competitive Pricing & Promotions

8. Price Optimization

OUR TAKE: Know the customer journey

Understanding your customers’ journey is essential in any good merchandising strategy. Develop processes

to get shoppers to the desired product as easily as possible. Continuously test content and optimize on-site

search, banners, product recommendations, landing pages, category and product detail pages.


imperative that the tools used can be leveraged across teams. This ensures that all assets are shared and

that consistency is delivered across all customer touchpoints, without causing internal chaos.

There is an ever-increasing array of tools and platforms available that enable merchants to manage

merchandising disciplines. Some of these tools are offered as part of the ecommerce platform, while others

are offered as standalone solutions.

Many organizations struggle with determining whether their digital commerce platform’s merchandising

capabilities are sufficient to support their strategy. The short answer is: “It depends.” Different organizations

will have unique needs and varying resources. Some platforms come with sophisticated merchandising

capabilities, while others only offer the basics. Depending on the objectives, resources, and platform used,

a retailer may opt to leverage its ecommerce platform’s merchandising functionality or implement third-

party merchandising solutions to augment the function.

Product Assortment Management

To grow and manage continuously faster-changing assortments – sourced from an array of vendor types

and sold through myriad channels – organizations need technologies that enable quick adoption and

marketing of new products on their site and through marketplace partners.

Some of these capabilities come standard on many modern ecommerce platforms. However, depending

on the complexity of assortment and business model, specific tools and platforms exist for each of them,

allowing greater control and customization of content.

Product Content Management

Product content is at the heart of digital commerce, and it is a critical aspect of consistent omnichannel

experiences. For manufacturers and suppliers, the effective management of product content is critical, as

the content is often distributed to retailers, marketplaces, and everywhere the product is sold.

Product Content Management (PCM) solutions, most often used by manufacturers and suppliers, allow for

collaboration around the creation of product data. PCM solutions include Product Information Management

OUR TAKE: Product information is as important the products you sell

Product information (images, descriptions, specifications, attributes, etc.) is today as important as the

physical product itself. Without product information, digital shoppers cannot discover, research, compare or

make an informed decision.


capabilities with Digital Asset Management and Syndication capabilities for distribution to marketplaces

and everywhere the product is sold.

As brands and retailers continue to prioritize and invest in product content, digital leaders will go one step

further to improve product content syndication. Syndication provides consistency across channels and

gives buyers and consumers the most complete and relevant shopping/buying experience.

Advanced Analytics Platforms

Advanced Analytics Platforms provide actionable insights that allow organizations to truly understand

the performance of their assortments and focus their efforts where they will have the greatest impact.

Most modern platforms leverage machine learning to provide predictive analysis and include customized

dashboards and visual representations of data for rapid digestion of results as well as drill-down capabilities

that allow for understanding the factors that drive success. Perhaps most importantly, these platforms

empower business users to quickly ask questions and obtain answers without being dependent upon

specialized analysts.

DID YOU KNOW?

Product content syndication is content that is automatically pushed to multiple channels from a centralized

platform. Brands and manufacturers syndicate their content to increase brand awareness, product

information consistency, SEO and conversions.

DID YOU KNOW?

71 percent of retailers agree the

main benefit of having detailed

product content is more sales. This

is closely followed by the ability to

personalize customer experiences.3


Catalog Management / Taxonomy

Beyond having the right site structure and browse

path, it is critical to have all the options readily

available for customers to hone in on what they

are looking for. Category pages with faceted

navigation that includes the details customers care

about, by category, allow customers to quickly

find and buy – even when there are hundreds or

thousands of results.

DID YOU KNOW?

84 percent of retailers in the FitForCommerce

Omnichannel Retail Index have implemented

faceted navigation wherein online shoppers can

select multiple attributes at a time.4

SEEN IN THE FIELD

Nordstrom helps shoppers find products faster by providing simple and clear

navigation choices and robust filtering options. The department store has also taken

steps to improve sort functionality with a “sorted just for you” feature which sorts

results based on a quick quiz where the shoppers identify brands they like or dislike.


Searchandising

As assortments grow into the tens and hundreds of thousands, or even into millions of SKUs, the ability

to easily find products has become a huge challenge for shoppers, and thus, for retailers. In B2B, this

challenge is intensified as B2B product catalogs often surpass B2C in sheer volume.

Customers increasingly turn to the search function to

find what they are looking for. Basic searchandising

(using search to actively highlight what the customer

is looking for) is table stakes for today’s ecommerce

players and includes such capabilities as:

• Rich and customizable auto-complete, featuring

products, brands, categories, etc.

• Fully-addressed user typos

• Semantic search that understands customers’

words including feature search such as “suede

jacket”, thematic search such as “spring jacket”

and compatibility search such as “iphone cases”

• Results that include filtering facets which are

dynamically generated to facilitate the rapid

selection of products

For many leading retailers, search

has increasingly taken over

merchandising. Search technologies

are making it easier for customers

to find what they are looking for

and putting the control of advanced

merchandising tools into the hands

of the business team. Modern search

tools leverage machine learning,

enabling results to grow smarter

through use, improving the relevance

of results.

In addition to advanced text search,

retailers need to prepare for visual

search and discovery experiences.

DID YOU KNOW?

Over 40 percent of customers will abandon

a site if they can’t find what they are looking

for within 2 minutes.5

SEEN IN THE FIELD

e.l.f. Cosmetics helps customers quickly

find exactly what they are looking for via

suggested results that include specific

categories, products, images and pricing.


Digital shoppers are increasingly embracing the use

of photos and visual search as part of their discovery

process. Sixty-two percent of younger millennial

shoppers are comfortable with the ability to search

products by image and 57 percent are comfortable

with shoppable content.6

Recommendations

Algorithm-driven recommendations have proven

to outperform hand-selected ones because

they leverage data about aggregated customer

behavior on site, favorites, and the actions of other

site visitors.

Most digital commerce platforms include

recommendation functionality. However, some

organizations opt to improve their recommendation

capabilities by implementing third-party

recommendation engines and personalization

solutions. These solutions often provide innovative

features that allow recommendations to be driven

by the actions and preferences of individual

DID YOU KNOW?

Retailers are taking note of the impact

of recommendations. According to the

FitForCommerce Omnichannel Retail Index:

• 90 percent display images of recommended

items on the product detail page

• 68 percent leverage the cart to provide

recommendations for purchasing additional

items8

SEEN IN THE FIELD

J.Crew includes a “shop the look” feature on

both category and product detail pages to

inspire shoppers and make it easy to purchase

a complete look.

DID YOU KNOW?

There are over 600 million visual searches on

Pinterest each month. Image-based Pinterest

Ads have an 8.5 percent conversion rate, and

Pinterest is projected to clear $1 billion a year

in ad revenue by 2020.7


shoppers – from clicks and site searches, to individual cart adds that reveal shopper preferences for

attributes of color, style, size, gender, category, and more.

Advanced preference centers allow customers to provide explicit preferences for what they care about

(activities, brands, sizes, etc.), enabling further personalization of recommendations, however, many still

forgo the immediate opportunity to gather more information about the individual customer.

According to the FitForCommerce Omnichannel Retail Index, 33 percent of leading retailers in the US have

implemented outfitting or “complete the look” functionality on product detail pages. Adopted by forward-

thinking apparel retailers, the outfitting

solutions that power these features leverage

sophisticated AI and machine learning to

automate outfit creation, personalize the

experience and improve results over time.

Gifting

Retailers leverage digital gifting to let

customers shop later than ever, or shop

when it is convenient for them and

schedule a timely gift delivery.

The gifting industry started with e-gift

cards that could be sent via email and up to

the last minute - many retailers offered the

ability to somewhat personalize the card

with an image of the customer’s choosing.

Next generation digital gifting allows gift givers

to select an item and allow their recipient to

choose the exact right size and color. As a result,

gifts feel more personal and desired, helping

retailers sell through product they already own

and reduce returns.

SEEN IN THE FIELD

Instead of traditional gift cards Neiman-Marcus

shoppers can send more personal gifts allowing

recipients to select their own size and color.

OUR TAKE: Your gift card program should be a revenue generator

Merchandise your gift card program as thoughtfully as you would any major product line. Allocate enough

resources (cash, time, and site real estate) to ensure its success.


Price Optimization

It is no surprise that the Internet has created massive

disruption in pricing. The competition is fierce, while

customers are better informed and have higher

expectations.

While dynamically changing pricing to respond to

competitors may not be ideal for every organization,

mastering pricing knowledge and nimbly adjusting

prices accordingly has become essential to

profitability. There are a number of technologies

available to help organizations become more savvy

about pricing.

Simple competitive price scraping has evolved to

pricing platforms that provide insights into pricing and

assortment opportunities vis-a-vis the competition

as well as a view into their promotional behavior for

in-season management and planning purposes.

Many organizations leverage these types of

platforms to assure competitiveness. Increasingly,

retailers combine this competitive data with the

knowledge they have about their customers to

selectively deliver offers and pricing that will make

a difference – without unnecessarily discounting a

product broadly.

Price optimization solutions that leverage machine

learning benefit from the ability to crunch massive

amounts of data in real time. These systems can be

tuned to optimize revenue or margin performance

while factoring in MAP, geography, inventory,

competitive pricing, weather, past customer behavior

and any number of other considerations.

DID YOU KNOW?

Increased price transparency, continued

consumer price sensitivity, and ongoing

competitor price aggressiveness are among

retailers’ main pricing concerns.9

SPOTLIGHT ON DATA

In today’s digital world, where products move

faster and shoppers are more sophisticated and

demanding than ever, retailers need nimbler

and more strategic merchants who leverage

data to support merchandising decisions

and technology to deliver more personalized

shopping experiences.

One of the advantages of digital commerce is

the easy access it provides to merchandising

data, transactional data, and customer behavior

data. More specifically, merchandisers have

access to vast amounts of data that can help

optimize merchandising strategies including

conversions, aov, product affinity, browsing

pathways, purchase data, social interactions and

customer demographics. This combination is a

powerful instrument to optimize ROI.

When supported by artificial intelligence and

machine learning, merchandising solutions

automate otherwise manual tasks, helping

retailers create more and better product content

and merchandising.

Planning and Sourcing–

Selling, both offline and online, is all about targeting the right

shoppers, offering the right product, in the right place, at the right

time, at the right price point. In other words, it is all about planning

and managing inventory. As customer behaviors change and they

become more demanding – it is impacting how organizations buy

and manage inventory.

Planning and Sourcing | 21 © 2019

BURNING QUESTIONS

• How do I accurately predict demand and plan accordingly?

• What is the significance of analytics in inventory planning?

• Why is customer-centricity so important in retail planning?

In a fiercely competitive environment, organizations need tools to help them better plan and manage the

supply chain, inventory and wholesale distribution. Forecasting sales, product production and inventory

planning based on trends and consumer demands are key aspects of successful retail.


In a customer-centric marketplace where retailers are

forced to offer greater assortments through multiple

channels, accurate planning is more critical, and more

complex, than ever. Organizations need tools to help

better predict demand and plan inventory accordingly.

Great planning and the right tools will help reduce risk and

costs and optimize inventory and retail distribution.

Enterprise Resource Planning (ERP)

ERP generally refers to integrated application software that supports an enterprise’s end-to-end business

transactions using a common database and presenting users with a common user interface and standard

methods of accessing data and functionality. The ERP system allows retailers and manufacturers to manage

the business and automate back-office functions.

OUR TAKE: It’s their world (consumers) - we just live in it (retailers)

Consumers constantly demand new, better and more personalized products and choices. And they

demand it on their schedule. In other words: they want what they want when they want it. It’s your job to

give it to them, and that requires careful planning.

PLANNING AND SOURCING TOOLS

1. Enterprise Resource Planning (ERP)

2. Inventory/Merchandising Planning

3. Vendor Managed Inventory (VMI)

4. Demand Planning


ERP system deployments are among the most complex, risky and costly system projects. Organizations

should clearly articulate and document why they require an ERP. This exercise includes documenting pain

points against the ERP functionality, benefits, costs and risks.

Committing to an ERP deployment is a cash investment of a non-trivial percent of an organization’s annual

revenue. It is critical to create a financially factual business case to justify the ERP investment. The business

case should include internal employee project time as a cost and be rigorous about the anticipated benefits.

To ensure optimal deployment of the ERP, organizations should consider hiring an experienced

implementation partner early in the process. The partner should fully understand the ERP landscape and

have practical implementation experience with various ERP systems.

It is critical to follow a formal process to determine

if an ERP package will meet the business

requirements. It is wise to avoid customizing or

adding additional software packages to make up

for any ERP shortcomings. Instead, be prepared

to make changes to business processes to match

the pre-built processes of the ERP rather than

changing its functionality.

Inventory/Merchandise Planning

Retailers must invest in planning and inventory management to succeed in today’s competitive and customer-

centric marketplace. There is a fine balance to the discipline of inventory planning - proper planning is

necessary to ensure not to over-invest in inventory, but also not to turn away customers or potentially lose

sales due to out-of-stock scenarios.

The need to plan by channel and location makes the planning and inventory management even more

complicated. Products are sometimes available across platforms and channels, and sometimes unique to

specific channels – e.g., online-exclusives. The chosen distribution strategies will impact inventory levels

and timing as well.

OUR TAKE: Change management starts early

Market the project internally, especially to

customer-facing employees. Communicate often

and consistently. Involve end-users in testing

and certification. Budget enough money for

training. Don’t forget external stakeholders like

customers, suppliers and other partners.

OUR TAKE: Don’t risk losing repeat customers

Generally, the more often you can turn over and refresh your merchandise assortment, the more loyal and

frequent customers will be. To keep customers coming back, both in store and online, you must constantly

update your inventory assortment and release new products.


It is important to plan assortment strategies to be nimble enough to meet the ever-changing demands of

the customers. In addition to updating the assortment, speed to market plays an important role. As soon as

a trend turns mainstream, customers want and expect it to be available. Retailers need the ability to spot

these trends and predict how long the demand will last. Having the right systems and processes in place to

allow for quick and accurate communication when new trends emerge is critical.

Smart organizations leverage predictive analytics tools

powered by artificial intelligence to guide how much

inventory to purchase and which styles will sell best

based on past performance and market trends. Supply

chain and inventory planning solutions leverage real-

time customer and supplier data across the entire value

chain to help organizations improve their supply chain

processes. These tools help determine the best product

selection to differentiate from competitors. With the right

tools, organizations can ensure that their inventory is

optimized and sufficient to fulfill customer demand, and limit overstock scenarios. Some solutions can also

help determine the most cost-effective way to store and ship products without carrying excess inventory.

A good inventory and supply chain solution can help organizations improve accuracy and speed of inventory

and merchandising decisions, create a comprehensive view of products, inventory and distributors. These

solutions will also help build demand forecasts and assortment recommendations based on buying behavior

at the SKU level, cluster and location level. Many of the leading solutions leverage machine learning and

artificial intelligence to provide improved insights and results.

To improve inventory planning and sourcing, organizations should:

• Leverage tools that include scenario modeling and analytics

• Optimize sourcing strategies, supply and distribution network, transportation routing and inventory levels

• Match supply to demand with near real-time inventory visibility enabled for product-specific, event-

level tracking

OUR TAKE: Inventory planning should be customer-centric

Your inventory planning should be customer-centric rather than product-centric. With the right tools you

should leverage what you learn about your customers from digital commerce to inform your inventory

strategies.

DID YOU KNOW?

60 percent of companies believe that most

supply chains will be demand-driven by

2020 and 40 percent state that increased

sales is a top benefit of demand-driven

supply chains.10


• Streamline customer order, fulfillment and return processes across your enterprise and supplier network

regardless of channel

• Improve sourcing and supplier collaboration

• Consider the use of cloud-based SaaS offerings to ensure the use of the most recent software version

• Leverage exception-driven processes to maximize productivity when paired with a user-centric interface

New technologies also enable improved

collaboration across teams and allow

for bidirectional planning and allocation

processes that are essential to keeping

information flowing and plans evolving,

from planning to execution and back.

VMI (Vendor Managed Inventory)

VMI is a business model where

organizations provide product activity

to vendors to compare against model

stock for each store location. Once a

vendor has this information, they integrate it with

their wholesale ownership to determine production

needs, what replenishment is needed by store to

create reverse purchase orders. VMI requires a

consistent flow of point-of-sale data that includes

sales and inventory by SKU at the door level.

Integration with wholesale inventory and production

is also required and the calculation of inventory

needs based on a variety of business rules and

ability to create and transmit purchase orders.

OUR TAKE: Take inventory

Moving inventory around is very costly – making even subtle improvements in inventory productivity makes

a big positive difference.

SEEN IN THE FIELD

Avon has developed a supply chain solution

specifically for its unique business model.

The system enables collaborative planning

and execution processes between Avon and

its suppliers, and it has provided Avon with

complete visibility of material availability and

constraints across its total supply chain.


Demand planning

Demand planning is a multi-step operational supply

chain management (SCM) process used to create

reliable forecasts. Effective demand planning can

guide organizations to improve the accuracy of

revenue forecasts, align inventory levels with peaks

and troughs in demand, and enhance profitability for

a given channel or product.

Demand planning tools help increase the sales and

profit for customers by:

• Increasing the amount of pre-planning and analysis

• Developing financial plans by item or category based on seasonality, the retailer’s promotional cadence

and margin goals

• Tracking retails sales, inventory and margin results every week and comparing to plan

• Making actionable recommendations on top-performing and poor-performing items

• Automating door-level replenishment

• Optimizing inventory levels needed to meet demand

SEEN IN THE FIELD

Stitch Fix employs 85 data scientists to help

drive efficiency throughout the company.

In addition to its styling algorithms, Stitch

Fix has algorithms for logistics, inventory

management, inventory procurement,

product design, demand estimates, etc. Since

the company uses data science pervasively,

they can anticipate the inventory needs of

clients and buy inventory accordingly.11


SPOTLIGHT ON DATA

Demand forecasting and inventory planning disciplines have always relied on data, but today retailers and brands have access to advanced platforms that bring planning to the next level. These advanced platforms integrate data from multiple sources and leverage AI and machine learning to automate otherwise manual tasks, while enabling a new level of predictive analysis.

Fifty-four percent of retailers consider expanding omnichannel initiatives as a top technology-driven strategy.12

Data plays a critical role in omnichannel initiatives, especially as it relates to inventory planning and sourcing. In addition to product and internal sales data, successful retailers increasingly leverage more customer data to help with planning and sourcing including POS transactions, CRM data, digital transactions and more.

In an omnichannel world, organizations must have insight into how much inventory is in stock and at what location or distribution center in order to successfully execute upon and deliver omnichannel experiences. Businesses with retail store locations must also have visibility into in-store inventory levels as products can be shipped between stores.

To be successful, retailers must ensure that the platforms they leverage are robust enough to support complex functions and fully integrated with other solutions in the ecosystem.

Content–

Engaging, high-quality content can be one of the most powerful

assets for brands and retailers. Content is a key differentiator in

digital marketing, onsite, and throughout the overall shopping

experience. There are many different types of content, and they

are typically divided into two main categories – product content

and brand/editorial content.

Content | 28 © 2019

BURNING QUESTIONS

• Does content really matter in commerce?

• What’s the big deal about personalization anyway?

• How do I manage all content assets across the organization?

Creating a good content strategy requires diligent evaluation of

how customers navigate through the decision-making process

and identification of the interaction points where relevant and

personalized content will inspire and drive conversions. The

content mix depends upon the customer characteristics and

products sold but will, in most cases, include different types

of content at different stages – from driving awareness and

traffic, to the actual purchase, and beyond.


According to a recent study, when it comes to content,

marketers are focused on developing more original content,

more visual content and optimizing content across devices.13

When supported by the right technology solutions, retailers can improve the content creation process,

streamline the management of content assets and enhance content distribution.

Between different content types and multiple channels and customer touchpoints, creating, managing, and

sharing content across an organization can be a headache. For a solid content strategy to work, all content

assets need to be readily available to the relevant stakeholders throughout the organization, including

creative, merchandising, marketing, ecommerce, and individual stores as well as externally with partners,

wholesalers, and others.

OUR TAKE: While content is king, context is queen

We all know queens really rule the kingdom. With the right data, content assets, and technology in place,

you can determine the personalization strategy that is right for your customers – and for you!

CONTENT TOOLS

1. Personalization

2. Photography/Video

3. Lifestyle/Editorial

4. Content Management

5. Product Information Management

6. Digital Asset Management

7. User-Generated Content

8. Augmented Reality/3D Visualization

Content | 29 © 2019

Unfortunately, retailers too often work in silos, using disparate systems with content assets stored in multiple

locations, hindering efficiencies and making it very difficult to ensure brand consistency across all customer

touchpoints, both offline and online.

Smart organizations invest in tools that enable them to streamline content creation, centralize content assets,

collaborate across the organization, and capture and leverage data to personalize customer acquisition

and retention strategies, and the overall shopping experience. This allows retailers to maintain control

of brand and merchandising consistency while ultimately saving time, removing friction, and eliminating

margins of error.

Personalization

It is impossible to talk about content without

focusing on personalization. Content is only

effective if it is personalized and relevant

to the shopper. Essentially, that means

delivering the right content to the right

person at the right time.

By combining historical, behavioral, and

customer profile data, it is possible to deliver

relevant and tailored experiences through

content that meets individual needs.

Effective personalization includes featuring

content that is specific to an individual

shopper at different points of interaction

during the purchase journey, including

email marketing, on the homepage, search

results, products pages, and so on.

EXAMPLES OF CONTENT PERSONALIZATION TACTICS

Videos and how-to’s based on products viewed

Wishlists and favorites lists

Real-time content updates in response to consumer intent

Targeted alerts and offers

Gender-based homepages and landing pages

Filter and search options throughout

the site

PERFORMANCE BOOST WHEN PERSONALIZATION IS USED

Frequency ofcustomer visits

Customer lifetimevalue

Average transaction size

Content | 30 © 2019

When content is personalized and contextually

relevant, it strengthens engagement and increases

the likelihood of turning a browsing visitor into a

buying customer.

Some digital commerce platforms may offer some

content personalization features to dynamically serve

relevant content throughout the shopping experience.

But, to fully embrace personalization across channels

and customer touchpoints, organizations should

consider investing in a third-party AI-powered

personalization solution with data analytics, onsite

personalization, and digital marketing capabilities.

Photography/Video

It is true what they say: “A picture is worth a thousand words, or more.” When it comes to digital commerce,

the importance of good photography cannot be overstated. Online shoppers cannot touch and feel products.

SEEN IN THE FIELD

Williams Sonoma cleverly injects relevant

content into multiple areas on their site to

engage, inspire and persuade shoppers.

For instance, shoppers will find recipe

suggestions on product detail pages,

guides for selecting the right type of

products, background stories about brands

and much more.

Content | 31 © 2019

So, it is up to retailers to provide the most authentic

product representation possible. Beyond detailed product

descriptions, high-quality photography is a must, and

videos go the extra mile.

It is important to carefully select photographers and vendors

that specialize in ecommerce product photography and

video, as opposed to lifestyle or editorial content. Beyond

product photography, however, it is wise to include lifestyle

and editorial content to augment the shopping experience

and make the experience feel more relatable. The goal

should be to delight and inspire shoppers through vibrant

imagery with which they can relate.

SEEN IN THE FIELD

American Eagle shows off products

from multiple angles both on and off

model to help shoppers visualize what

the product looks like. The company

also features custom images by color

selection. In addition, they offer a

‘frequently bought together’ module to

show outfitting options, driving upsells.

OUR TAKE: Show off your products

Don’t cut corners around product photography. Good photography can make all the difference when

it comes to convincing a shopper to make a purchase. Be sure to include multiple rich photos, detailed

imagery, swatches, and even video when appropriate. It is worth the investment.

Content | 32 © 2019

Lifestyle/Editorial

While good product information and specifications are always

critical, content should be used to promote products, inspire,

educate, and ultimately, move the shopper from discovery

to purchase. Blogs, How-To guides, and instructional videos

represent examples of how to provide genuine, helpful content

to inform and inspire. Combined with third-party expert- and

user-generated content incorporated on homepages, category

listings, product pages etc., retailers can further establish themselves as trusted advisors and build loyalty.

While many have invested and adopted content marketing into their overall strategy, many still struggle

to properly integrate content into the purchase path. To ensure that content is most effective, it should be

integrated into product pages and lifestyle and editorial content in blogs; other areas should incorporate

merchandise with shoppable functionality (add-to-cart or “save for later” lists).

SEEN IN THE FIELD

Part inspirational destination, part

self-help, Home Depot has created

an entire section dedicated to ‘DIY

Projects & Ideas for common issues

their customers need to solve.

OUR TAKE: Kick it up a notch

Product descriptions and catchy headings are no longer enough. Organizations need to create more

engaging, visual, and personalized content to capture the attention of an ever-fleeting audience. But don’t

forget to keep SEO in mind when developing content – make sure it is Google friendly.

Content | 33 © 2019

Content Management

Many digital commerce solutions include some content management features, but they are typically highly

focused on transactional content. Some companies opt to augment their capabilities with solutions that offer

automated content management functionality with a friendly interface for business users. The combination

of content and commerce has proven so effective that some content management systems are now also

offering commerce functionality.

Product Information Management (PIM)

Product Information Management systems (PIM) are designed to help manage all the information needed to

market and sell products through a myriad of distribution channels. The PIM solution provides a central set of

product data including attributes, copy and taxonomy that can feed websites, in-store knowledge bases, print

catalogs and data feeds to partners. PIM solutions become even more important to organizations expanding

to international distribution, which can require localized information, pricing and multiple languages.

Asset Management

Digital asset management tools (DAM) provide a

centralized library to store, organize, find and share

digital files, including images, photos, creative files, video,

audio, documents and more. Digital asset management

solutions are often used by creative staff and other

stakeholders across the organization, as well as external

partners. These solutions allow for easy and controlled

access to all digital assets. More advanced digital asset

management solutions resemble content management

and offer capabilities including cloud storage, version

control and brand management features enabling

creative workflow automation, usage tracking and more.

OUR TAKE: Make it sharable

Make sure that all that great content you create is easy to share. The more your customers share, the more

likely you will see more shoppers visiting your site. At that point, it’s up to you to close the deal.

DID YOU KNOW?

26 percent of content marketers leverage

a digital asset management system

(DAM). These systems are expected to

become more popular as AI strengthens

and improves the technology.14

Content | 34 © 2019

User-Generated Content

Besides pushing relevant content through social media

channels, savvy organizations leverage social media

channels and tools to encourage customers to create

and share unique content, which they can pull into

their digital channels, in stores and even print media.

Featuring products “in action” such as customers using

or wearing products on homepages, product detail

pages and in marketing materials, is a powerful tactic to

increase conversions, providing context to the products

shoppers are considering as well as providing assurance

in the purchase decision.

Influence the Influencers

Leveraging influencers to market brands and products

has proven highly effective for many brands, but it

does not come without its challenges. According to a

recent study, retailers struggle with determining the ROI

of influencer marketing programs and the amount of

time it takes to manage these programs.16 Retailers are

DID YOU KNOW?

The ability for customers to upload

customer photos online is offered

by 46 percent of retailers, 31 percent

pull Instagram photos into the online

experience; leveraging those photos to

enhance the in-store environment is done

by only a few.15

SEEN IN THE FIELD

Rent the Runway and Lulu’s are seeing

great benefits from using customer photo

reviews: pictures the customer posts of

themselves wearing the item, usually with

the size purchased and the customer’s

measurements posted alongside the photo.

Content | 35 © 2019

increasingly focusing their influencer programs

on leveraging multiple types of influencers such

as a mix of celebrities, bloggers and micro-

influencers. There are many influencers who are

eager to work with brands but it is important to

ensure brand alignment when selecting the right

advocates with which to partner. An influencer’s

reach and audience is of utmost importance, as

is the type of content the influencer currently

shares with followers. More and more retailers

are using influencer content to improve the

performance of other channels and integrate

influencer content with ecommerce to drive

product sales. It is recommended to allow

influencers to create unique content, not merely

repost an organization’s original content. That

way, is it possible to also leverage their content

on an organization’s own social media channels,

websites and other marketing vehicles.

Augmented Reality and 3D Visualization

Some organizations innovate with new

augmented reality capabilities, from

Augmented Reality (at Home Depot

and Sephora), to reinvention of 3D

visualization (at retailers like Wayfair

and Blue Nile) to help shoppers

visualize what a product looks like on

or in a home setting.

DID YOU KNOW?

• More than half of brands think influencers are

“vital” to their social efforts17

• 89 percent of brand marketers agree or strongly

agree that influencer marketing could positively

affect brand perception18

OUR TAKE: Make your content social-friendly

• Allow content to be shareable to increase its

reach and likelihood for recommendation.

• Provide a way for users to share or upload their

own content onto your site when it features your

products.

• Enable UGC wherever possible, particularly

within product detail pages.

SEEN IN THE FIELD

Ikea Place allows users to place virtual Ikea furniture into their own home to see how everything might

look once assembled. Shoppers can also share pictures or save them, and use the app to price and

reserve the items (and eventually buy).

Content | 36 © 2019

SPOTLIGHT ON DATA

Data is at the foundation of personalization and content is at the core of delivering personalized experiences across all customer touchpoints. Retailers can, and should, leverage data to better understand shoppers throughout the customer journey, and use those insights to create and deliver the content that will drive the best results. Data, supported by personalization technologies, enables retailers to deliver highly relevant and personalized content to the right people, at the right time and place.

Successful retailers continuously evaluate how different content assets perform by analyzing key data such as views, interaction points, click-throughs, engagement and more.

In addition, data and AI is starting to have a impact on digital asset management, partially automating processes and reducing errors. In fact, almost 60 percent of marketing leaders believe AI will have a substantial impact on digital asset management technology over the next few years.19

User Experience–

Each and every interaction a shopper has with you is critical. The

smallest changes to the user experience can have a significant

impact on the individual shopper’s experience, and in the long

term, your entire business.

User Experience | 38 © 2019

BURNING QUESTIONS

• What tools can help me measure my user experience?

• What areas should I focus on to optimize the user experience?

• How do speed and load times affect the user experience?

A great user experience can win a customer forever, but a lackluster experience can have a detrimental

impact – the individual customer may never return, share negative experiences with families, friends and

social media, discouraging potential customers to shop. An experience that exceeds expectations, on the

other hand, can result in a satisfied and loyal customer who will not only come back, but will also send new

customers your way.


Most people associate user experience with design and

user interfaces, but user experience is much more than

that. It includes every interaction a customer has with an

organization’s digital interfaces – including ecommerce

sites, mobile apps and even in-store kiosks. And it includes

every aspect of the experience – from site design and

navigation, to features and functionality, checkout, all the

way through to delivery and even post-purchase.

The most critical element of a good user experience is

to meet the needs of the customers within a reasonable

set of time, with no confusion, frustration or errors

– essentially providing a “frictionless” experience,

regardless of touchpoint.

There are two major aspects to user experience – the

design, features and tools that create the experience

and the tools to measure the performance and optimize

the experience. Although much of the user experience

work might fall under the responsibility of the design and

development team(s), every member of an organization

must consider the impact of every decision they make

DID YOU KNOW?

64 percent of online retailers reported

that optimizing the user experience (with

features like enhanced search, navigation,

product content and overall ease of use)

is one of their top priorities.20

CONTENT TOOLS

1. Design/Creative

2. Usability (primarily testing tools and methodologies)

3. Website Performance Optimization

4. Site Search/Navigation

5. Voice of the Customer (ratings, reviews, Q&A)

6. Personalization


about the user experience – that includes buyers, merchandisers, marketers, operations, fulfillment, and of

course, designers and UX/UI employees.

Creative/Design – Form Follows Function

A brand’s visual brand identity – logo, color schemes, fonts, visuals – is extremely important. How

organizations visually present themselves says a lot about who they are. But it is important to make a

distinction between corporate/brand site design and ecommerce, as different rules apply. For ecommerce,

in addition to telling the brand story, the primary function of the site is to sell.

When designing for ecommerce and other digital channels, retailers should start by fully understanding the

target customers and how they shop. Demographics, socioeconomics, interests, shopping behaviors, etc.,

should impact the layout and design of digital interfaces. Merchandise assortment and types of products

offered will also drive how the site looks and the kind of functionality needed to optimize the user experience.

In addition, content, links, navigation, functionality and error handling may affect the design and need to be

defined and approved before the creative look and feel is applied.

The Need for Speed

Some retailers use up to 50 third-party applications to provide richer user experiences – the industry

average is 27. These applications are essential for engaging customers, but they also result in third-party

violations (when applications take an extended time to load, fail to load, or block an entire page from

loading completely) that can significantly sacrifice site performance and drive buyers to competing sites.22

OUR TAKE: Let “Personas” set the direction

Create User Personas to identify similar customer types and use these personas as guidelines when

designing your site. Understanding the demographics, motivations, goals, task flows, and desired

functionality of your customers will help you prioritize and improve site design.

OUR TAKE: Don’t Guess. Test.

On average only one out of four A/B split tests yield the expected results. So, if you’re not testing

everything, you’re off 75 percent of the time.21


With the implementation of a web/mobile optimization

solution or ecommerce acceleration solution, retailers

have full visibility into how third-party ecommerce

applications impact the performance of their sites.

These platforms provide control to reduce third-party

violations, resulting in improved performance and, in

some cases, as high as 10-20 percent conversion lift.23

Usability

Great usability of web, mobile, and other digital

interfaces is necessary to succeed in today’s competitive

market. If a site is difficult to use, if customers cannot

find what they are looking for, or if the shopping

process is too cumbersome, shoppers will quickly leave

for a competitor. There are several tools that can help

measure and optimize the usability of digital interfaces.

OPTIMIZING THE USER EXPERIENCE

• Conduct a site assessment with a UX expert to identify potential usability issues

• Evaluate analytics and create dashboards of customer-experience-related KPIs

• Conduct small user tests on key shopping paths and pages on your site

SEEN IN THE FIELD

Following the launch of their responsive site, Moosejaw,

a leading outdoor retailer, realized that its website

content was not optimized for mobile devices, resulting

in unacceptable mobile performance and load times.

Moosejaw deployed an optimization solution that

allowed Moosejaw to significantly accelerate website

loading and improve shopper experience. As a result,

Moosejaw was able to realize 20 percent desktop

growth and 50 percent mobile growth.

DID YOU KNOW?

Spending 10 percent of your development

budget on usability should improve your

conversion rate by 83 percent.24


• Conduct card sorting to identify ways to optimize product taxonomy

• Invest in A/B testing tools to test out theories and findings from assessment and user testing

Eye Tracking

Leveraging sensor technology, eye-tracking solutions are primarily used to identify where users are looking

on a digital interface. Coupled with sophisticated algorithms, eye tracking can determine a user’s attention,

focus, drowsiness, and other mental states. Retailers leverage this information to gain insights into consumer

behaviors and to pinpoint usability issues.

Click Tracking

Click-tracking solutions provide the ability to monitor how users got to a site, where they click, and where they

are not clicking. This includes scrolling and browsing behavior on a site or within a mobile application. The

goal of click tracking is to identify usability issues and on-page behavior.

Card Sorting Exercise

Card sorting is a research technique for discovering how users understand and categorize information. Card

sorting is typically used for insights into how to group and label website content in a way that makes most

sense to the audience. Card sorting is particularly useful for building the structure of a site, deciding what

content goes where, determining the navigation, and optimizing product taxonomy.

A/B Testing

A/B testing tools serve two different pages to learn which page performs better. Many content solutions

already include tools to automate this process, and there are several web optimization tools that can be easily

added to existing platforms.

Site Search/Navigation

Site search solutions bring contextualization techniques

to search in order to better answer customer queries

and deliver contextual promotions by changes to

search algorithms and merchandise features. The

more advanced solutions, however, go a step further,

delivering contextual search results by taking into

account behavioral, situational, and historical data.

DID YOU KNOW?

Faster search is the top priority for new

website features to deploy among US

distributors.25


Ratings and Reviews

Ratings and reviews provide

customers with trusted feedback that

helps them make informed purchase

decisions. Ratings and reviews have

become pretty much the norm –

customers expect the ability to easily

find reviews and recommendations

from other customers when they

shop. Most digital commerce

platforms include basic reviews and

ratings features. However, third-party

providers can offer more advanced

solutions that include social

media integrations and Customer-

Generated Q&A functionality.

Personalization

Personalization plays a significant role in optimizing the user experience. It is all about knowing who the

customer is, and using that information to create a meaningful and relevant user experience, guided by

what she wants and when she wants it. Every step along the shopping journey is an opportunity to connect

and engage to strengthen the user experience and build a strong, personal relationship that drives sales

and loyalty.

SEEN IN THE FIELD

The Container Store brings

customer ratings to the forefront

on the category page, allowing

shoppers to refine product listings

by ratings and includes ratings

for products on the page. The

company also allows shoppers to

sort by ratings.


Although many retailers try to replicate Amazon’s personalization approach, most do not have the resources

(or data) available to build the same sophisticated features. There are, however, many options available that

do not require costly in-house development. Using data analytics, supported by digital commerce platform

capabilities and other best-of-breed personalization technologies, organizations can still provide contextually

relevant experiences by delivering content that resonates with consumers.

DID YOU KNOW?

Next-gen personalization solutions leverage AI-driven engines that can process vastly more data than other

solutions and use sophisticated algorithms that predict individual shopper desire and intent in real time.

These solutions have proven to increase Revenue per Visit by over 10 percent in controlled experiments

against older personalization approaches.26

HomepagePersonalize based on arrival channel profile

Search / Category PagesBias search results,

personalize look and feel

Product PagesPersonalize recommendations,

target content and merchandising

LoyaltyPersonalize offers and communications,

loyalty program rewards

Add to CartUpsell, cross sell, personalize

promotions and offers

CheckoutRedeem offers, manage shipping,

billing and gifts


SPOTLIGHT ON DATA

Data is at the core of good user experiences. Retailers leverage data to design exceptional user experiences and rely on data to analyze and optimize user experiences across all customer touchpoints. When it comes to user experience, the core data challenge is less about the sheer volume of data, and more about the siloed nature of how data exists and is used. There are many different tools and measurement methods, each of which generates its own highly specific “bubble” of data that needs to be analyzed independently to be understood. Synthesizing it all into a holistic picture has simply been near-impossible. The good news is that a rapidly emerging new class of AI-driven tools shows great promise toward “seeing the forest for the trees.” This is especially evident in the area of personalization.

There are now quite a few personalization platforms that have surprisingly mature machine learning algorithms that can absorb disparate data from multiple systems and begin detecting patterns and relationships that help inform the content displayed at numerous customer journey touchpoints. As a result, all the user experience data collection tools can now directly feed a downstream system designed to produce the optimum experience tuned to each individual customer.

Marketing Acquisition–

You have the products, you have the store, now you just need the

customers. Setting up shop is half the battle – generating traffic and

converting window shoppers to buyers comes next. In the past, foot

traffic and word-of-mouth were essential to retail success. That still

holds true. But today, foot traffic often comes in the form of online

search, and word-of-mouth comes in the form of social media.

Marketing Acquisition | 46 © 2019

BURNING QUESTIONS

• How do I drive more qualified traffic to my site?

• What tools should I use for acquiring more customers?

• What data should I capture to support my marketing initiatives?

In today’s retail world, shoppers move interchangeably between channels and it is therefore imperative that

marketing strategies are executed, and integrated, across both digital and offline touchpoints. Based on

the goals of the organization there are numerous moving parts – for many, it can be daunting to determine

the right approach, prioritize efforts, and select the right tools to support the acquisition strategy.


Optimizing strategies for acquiring and retaining customers

should always be top of mind. There is no business without

customers, and acquisition needs to be a focal point of any

marketing strategy.

Customer acquisition tactics – also known as paid digital

marketing channels – includes Paid Search (SEM), Display

Media Advertising (web and mobile), Affiliate Marketing,

Comparison Shopping Engines (CSE), Marketplaces and paid

advertising on social media channels. While Search Engine

Optimization (SEO) is also considered a customer acquisition

channel, it is not a ‘paid channel’. Each of these tactics require

a unique set of skills to master and tools to help support the

efforts to optimize results. Some organizations may have the

internal capacity to manage everything in-house. But each

OUR TAKE: Give them what they want

The goal of a successful marketing acquisition strategy is to anticipate customer needs – where and when

they search – to make sure they find you and the products you sell, and at the same time, to deliver relevant

and, whenever possible, personalized experiences that encourage coveted click-throughs.

MARKETING ACQUISITION CHANNELS, TOOLS AND SERVICES

1. Search Engine Marketing

2. SEO

3. Display Media (Prospecting and /Retargeting)

4. Social Media Advertising

5. Affiliate Marketing

6. Comparison Shopping Engines (CSEs)


of these channels requires thorough knowledge and ongoing optimization; and most organizations can

benefit from tapping into a range of services offered by specialized digital marketing agencies to help

build campaigns and audience segments and optimize results. Furthermore, these agencies can optimize

campaigns based on results seen across their client base.

Search Engine Optimization (SEO)

Many consumers start the shopping process

on a search engine (most often Google) – to

research product options, get information about

brands, find reviews, or to locate a store – and

SEO is, therefore, often considered one of the

most important components of the marketing

acquisition strategy. For any business, SEO is

an effective and inexpensive way to get in front

of potential new customers and a strong SEO

program is crucially important.

Ecommerce sites are designed to be

transactional and have historically not been

very SEO-friendly, lacking the content required

to achieve good search rankings and challenged

by factors such as rapidly changing product

detail pages and similar product keywords

and page titles as competitors.29 Fortunately,

today, many digital commerce platforms are

developed with SEO in mind and include a

technical architecture that enables search

engines to pull website content, merchandise

and page information.

OUR TAKE: Quality matters

While shopper traffic is great, it doesn’t matter much unless it is centered on finding the right people at the

right time in their shopping journey (those who will actually buy your products). It is critical to know your

prospective customers and target your acquisition strategies to that audience based on the goals of the

organization as well as expected ROAS.

DID YOU KNOW?

SEO topped marketing budget allocation for

marketers in 201827 and 93 percent believe SEO it

is extremely or very important for sales that their

company website ranks high in search results.28

Topmost Challenges for SEO ProfessionalsSource: SEO Strategies, Techniques & Trends: 2019 Survey

Providing ROI

Single Page Ranking for Multiple Keywords

Frequent SERP Changes

Google Penalty Recovery

0 20 40 60 80 100

83.3%

66.7%

33.3%

16.7%


Relying on the digital commerce platform exclusively to

optimize search results is not enough. Managing SEO

requires a highly specialized skillset, and many marketers

agree that it can be challenging to do internally. They

report that their SEO strategies are missing key tactics

such as automation of daily changes, creation of new

and unique content, incorporation of big data and the

use of artificial intelligence.

Furthermore, many struggle

with proving the ROI of SEO. For

most organizations, it can pay

off to partner with a marketing

agency that specializes in SEO

to ensure the best rankings

and exposure possible.

Content and Context Matter

The face of SEO is changing

rapidly, mainly due to the

incorporation of artificial

intelligence (AI) into search

algorithms. Google’s search

engine previously located

and ranked sites based on

keywords and inbound link

counts. It now also weighs

expertise, authority, and

trustworthiness of content

as well as website performs as Google negatively

impacts a retailer’s SEO indexing if the mobile or

desktop experience is slow.31 Instead of focusing on

keywords, search engine algorithms such as Google’s

RankBrain algorithm attempt to “understand” content.

Most organizations have realized the power of good

content in commerce, product and lifestyle/editorial

content, as a key differentiator and are also leveraging

content as a way to improve SEO.

SEEN IN THE FIELD

Home Depot deploys a strong search

engine marketing strategy combining both

SEO and paid search tactics. The above

refrigerator example shows Home Depot as

number one in organic search and an SEM

(paid search) PLA campaign.

DID YOU KNOW?

51 percent of U.S. and UK shoppers began

the journey to their latest purchase with an

online search.30


As Google, and other search engine, algorithms

become more sophisticated, SEO strategies must

become more sophisticated, too. It is almost

impossible to stay up-to-date on SEO best

practices without a dedicated SEO resource or the

help of an external partner. Organizations should

consider leveraging next-generation SEO tools

powered by AI and machine learning to improve access to relevant data and to automate processes for

optimizing search engine results.

Paid Search

When done right, paid search can be one of the strongest ways to drive new traffic. But it can also be

extremely challenging. Organizations must constantly manage the bidding of brand and product terms to

ensure competitive ranking, stay within budget, and manage the return on ad spend (ROAS). At the same

time, it is critical to optimize the strategy for both desktop and mobile. Other factors, such as localization

and relevant site links to optimized landing pages should be utilized to ensure the post-click experience is

relevant to the user’s search criteria.

OUR TAKE: You need to think about Voice

To stay ahead, you must stay on top of new trends that impact SEO such as the increasing popularity of

voice search. According to Google, 55 percent of teens and 40 percent of adults use voice search daily.

Voice search requires a whole new keyword research approach: Voice searchers use normal, conversational

sentences instead of the traditional query lingo.33

DID YOU KNOW?

96 percent of marketers believe that their SEO

strategy could benefit from AI.32

OUR TAKE: You cannot do it all – at least, not alone

Paid search is constantly evolving. The deployment and management of a successful search engine

marketing strategy requires highly-skilled expertise and is extremely time consuming. In today’s competitive

marketplace, it is almost impossible to manage successfully in-house. Don’t be afraid to go outside for help

for bid management and account support services.


Optimizing the Paid Search Strategy

A good paid search strategy involves selecting high-performing keywords that drive relevant traffic. The

right keywords can make all the difference, determining how well advertisements rank on Google and other

search engines.

Purchasing text keywords is not enough. It is just as important to optimize paid search strategies to make

sure that the investment pays off well. This includes making sure that website landing pages are optimized

and relevant to search terms, constantly managing bids, testing creative, customizing ads for mobile, etc.

The daily management of the search program is a critical aspect of a successful search engine marketing

strategy, as keyword and budget allocation will likely change from month to month and season to season.

Comparison Shopping and Product Listings

Like paid search advertising, comparison shopping

engines (CSEs) and product listing ads (PLAs) use

a pay-per-click model and include sites like Google

Shopping, Amazon and Bing Ads. Products are

grouped according to keyword searches, which

means similar products from different sellers may

be listed on the same page, allowing for users

to visually compare products and prices. When

a user clicks on a product, she is sent to

the retailer’s product detail page (PDP) to

complete the purchase.

Local Inventory Ads (LIA’s)

Local inventory ads are a key driver for

delivering an omnichannel experience by

letting local shoppers know that a retailer

has the items they’re looking for in stock, the

moment they search on Google.

Local inventory ads showcase a retailer’s

products and store information to nearby shoppers

searching on Google. When shoppers click on an

LIA, they are taken to a Google-hosted website

landing page called the local storefront. Shoppers

use the local storefront to view in-store inventory,

get store hours, find directions, and more.

SEEN IN THE FIELD

Bed Bath & Beyond displays in-store messaging

in their PLA campaigns to capture shoppers

when they are searching for specific products

to drive traffic to a local store.

DID YOU KNOW?

In Q1 2017, PLAs accounted for more than half of

retail search ad clicks and spending on Google

Shopping rose by 32 percent year over year in

Q1, compared to 12 percent for text ads.34


Display Advertising/Retargeting

The main purpose of display advertising is to deliver

general brand messages and product promotions

to key audiences on third-party sites and social

media. Visual in nature, display ads can take many

different forms and contain items such as text,

images, video, and audio. They present a great way

to appeal to new customers and encourage them

to visit a seller’s site.

There are two main ways to buy digital display advertising space and reach customers: Direct Buys and

Programmatic Buys. Direct buys, similar to print advertising, allow a marketer to buy advertising space directly

from a publisher or website, but can be extremely expensive and make the assumption that customers will be

on a particular site at the time when ads are live. Programmatic advertising, used by most marketers, helps

to automate the decision-making process by targeting specific audiences and demographics, regardless of

what website they are visiting.

Programmatic advertising allows marketers to truly target and serve ads to those users who are most like

their target audience. Therefore, it is not surprising that programmatic advertising is, by far, the most popular

form of display advertising today. The advent of Real-Time Bidding (RTB) in recent years, enables publishers

and advertisers to offer serve the right ads to the right audience in real time.

Retargeting, or remarketing, serve targeted ads to customers who have visited a website and viewed a

specific item, but left the site without purchasing that item. This is the most common form of programmatic

display advertising. Retargeting is generally less expensive than prospecting campaigns and the results are

often better because the products featured have already been viewed by shoppers.

Behavioral targeting is another type of programmatic advertising that is gaining traction with retailers.

Behavioral targeting leverages data about a user’s browsing behavior, including page visits and search. This

data is then used to serve ads to users that fit the same behavioral and demographic attributes.

The display advertising technology space can be a bit confusing, with many different platforms and service

providers fighting for retailers’ share of wallet. Here’s a quick overview of the different types of platforms:

DID YOU KNOW?

The total US digital ad spend is forecasted to

reach nearly $130 billion in 2019, of which $65

billion will be spent on display ads.35

OUR TAKE: Let’s get personal

Shoppers react best to personalized messages. Leverage data and retargeting to make sure your messaging

and promotions are relevant to the individual shopper.


• Ad exchanges are online marketplaces that help publishers make their inventory programmatically

available to buyers (typically, ad networks or demand-side platforms) or sellers.

• Ad networks aggregate unsold ads from publishers to sell to advertisers, including from ad exchanges.

While advertisers used to have to buy impressions upfront, some ad networks now offer programmatic

capabilities.

• Demand-side platforms (or DSPs) are

central places for marketers to buy,

serve, and track inventory across ad

networks and ad exchanges. DSPs

typically offer more customization

options, and many DSPs can integrate

first-party or third-party data to inform

audience segments and bidding rules.

Organizations can benefit from partnering

with a digital advertising expert to help

ensure that they achieve their campaign

goals and get the highest return on

their advertising investment. Best-in-

class digital agencies use sophisticated

methodologies and data to best target

the desired audience segment via the

right media channels and vehicles.

Mobile Marketing

For many consumers, mobile has replaced the

desktop as their go-to device. In 2015, mobile search

surpassed desktop search for the first time in the

US, making the smartphone the connected digital

device of choice. Retailers should fully embrace a

mobile first strategy as a core pillar for customer

acquisition and retention, both online and in-store.

Mobile search trumps desktop search by over 50 percent, making it a powerful vehicle to drive site

(and store) traffic. When it comes to mobile shopping, most statistics show that mobile-optimized sites

have a higher direct conversion rate compared to consumer apps that are more effective in deepening

engagement and loyalty. The most successful strategies take a multi-pronged approach to mobile, where

The Daunting Display Advertising Landscape

DID YOU KNOW?

Mobile ad spending will reach ~ 73 percent of

total digital ad spending in the US in 2023.36


mobile search and the mobile site are primarily used for acquisition and the mobile app is an engagement

and retention tool.

Paid search through desktop and mobile is

remarkably similar. The only difference from

a bidding perspective is that while campaigns

for desktop and mobile are the same, there is

a mobile modifier that allows retailers to bid

up or down relative to desktop results. This

generally holds true for display ads across

desktop and mobile.

Mobile ads are on track to represent more than

73 percent of US total media ad spending in

2023. The retail industry has spent more than

any other industry on mobile ads – a trend that

is expected to continue.

Social Media

In 2023, it is expected that 76 percent of the

population in the United States will be using social

networks.37 Facebook alone has over 2.3 billion active users worldwide.38 That represents billions of users

who share their lives via social networks every day, including their opinions about brands and products.

There’s no doubt, social media can be a valuable customer acquisition channel. But many retailers struggle

with determining the social strategy that will give them the most bang for their buck. Some organizations

use social media solely to push products and brand content to consumers, while others pull user-generated

content, such as customer photos of products on social, onto their sites to create more engaging user

experiences. The right social strategy depends on the business, the products sold, and more importantly,

the target audience.

OUR TAKE: Mobile is not an exotic creature

Mobile is the most powerful of the critical elements behind the overall strategy for meeting shopper

expectations for more value, greater convenience, and a better customer experience across all channels.

Some retailers treat mobile as its own channel, but it should be viewed as a device and part of the overall

digital mix. Mobile is critically important, but not exotic.

$90.34$35.41

Digital Ad Spending, by DeviceUS, 2018-2022 · Source: eMarketer, March 2018

2018

2019

2020

2021

2022

$74.97

$105.25$36.99

$118.93$37.50

$131.41$39.07

$32.33

Mobile Desktop/Laptop


Beyond advertising on social media networks,

organizations should build a valuable and relevant

presence on the social media sites their target

customers use. Organizations can build value by using

social media to deliver relevant content and product

promotions and by using the channel to foster

relationships through open dialog with shoppers.

Social media is the de facto “word-of-mouth” channel

today, and perhaps one of the most powerful ways

to acquire new customers. The act of customers or

influencers sharing their brand/company experiences with their social media networks and followers

can organically grow an organization’s audience. What shoppers’ share about a brand or product has

tremendous value to organizations, by learning about customers, expanding reach, and using customer

data – reviews, ratings and user photos and videos – to influence other shoppers.

Most retailers leverage different social media automation platforms to help manage their social media

efforts, including marketing automation tools to push relevant content to different networks and social

SEEN IN THE FIELD

Fashion apparel brand Zara uses social

media to connect with loyal customers on its

branded pages as well as connect with new

customers through advertisements on social

networks. Zara customers are also highly

active and engaged on social media sharing

their outfits and tagging the retailer.


media analytics to help inform what customers

are talking about, how they share content, and to

help optimize social media programs.

Affiliate Marketing

When carefully planned and managed, affiliate

marketing is a cost-effective and efficient way

to broaden reach and drive new customer

acquisition.

Before launching an affiliate marketing strategy, it is important to assess internal team capabilities and

bandwidth. Managing many affiliates and complexities of handling payments, pricing tiers, and reporting

can be a lot of work, and may, in some instances, require a dedicated affiliate manager and/or a team to

manage this business channel.

In most cases, it will make sense to leverage an affiliate network rather than attempting to build your

own. The network helps to manage the relationships and information between affiliate publisher sites

and retailers (a.k.a., advertisers). Retailers give the network access to product feeds and key company

information, like promotional calendars, new product arrivals, and marketing offers. The publishers get paid

a percentage of sales, when a customer clicks an item on their website from a retailer and then completes

the purchase, most commonly on the retailer’s website.

The management of payments is a tremendous benefit of working with a network, rather than a retailer

sending hundreds or thousands of checks from the retailer to the publisher. The retailer is responsible

for paying both a commission on their items sold as well as a fee to the network for their services. Most

commonly, the network fee is a percentage of sales. In addition, some retailers pay publishers a bounty, or

cost per acquisition (CPA), to drive lead generation (e.g., pay a $1 bounty per email acquired).

HEARD IN THE FIELD

“Social is a huge source for customer

acquisition. I think it is here to stay but there is

still a lot of learning on how to leverage it best.”

Julie Bornstein, COO, Stitch Fix

OUR TAKE: Do your homework

Research and plan your affiliate marketing strategy carefully. Talk to your customers and learn about their

online habits to determine what sites to add to your network. There are niche publishers out there who likely

have your current audience’s eyeballs already.


OUR TAKE: The 80/20 rule almost always applies

Most affiliates may never send you a sale. Your top affiliates will grow with you and should be nurtured. Finding

new affiliates with potential and discovering which to cultivate and which to forget comes with experience.

SPOTLIGHT ON DATA

Build it and they will come… that never happens. Retailers must invest in marketing acquisition programs to build and grow their businesses. This starts with a deep understanding of audience segments including demographic and behavioral data as well as the performance and ROI of different acquisition tactics.

There are numerous benefits to leveraging and utilizing data throughout marketing acquisition programs. This includes personalized and data-driven campaigns. The practical application of data utilization includes retargeting campaigns, dynamic ads on social platforms such as Facebook and Instagram and dynamic search ads on Google.

However, there can be obstacles to wrangling the data sources and then utilizing the right data for executing personalized campaigns. Retailers need to have the right team or vendor partners in place and leverage centralized technology to store transactional data, online order data, website clickstream data, customer data and preferences, social signals and more.

Marketing Retention–

You spend time, money, and resources on attracting and

converting shoppers. The next step is to engage and retain

those same customers. The most successful customer marketing

retention strategies focus on highly-targeted and personalized

relationship-building tactics that foster deep loyalty, advocacy,

and increased lifetime value.

Marketing Retention | 58 © 2019

BURNING QUESTIONS

• Where/how should I focus my marketing retention efforts?

• Should I invest in a loyalty program?

• What technologies should I invest in to support my efforts?

Maintaining a healthy customer retention rate is all about keeping customers happy. How to improve customer

experiences and engagement should always be top of mind when devising the retention marketing strategy.

Customer-retention marketing strategies primarily include email campaigns, display retargeting, loyalty

programs and communication. The key ingredient for highly successful strategies is personalization. The

most successful retention marketing strategies leverage data to identify where the individual shopper is in the

customer journey and using those insights to create relevant marketing messages to deliver at key moments

and touchpoints where they will matter most.


The marketing technology landscape can be quite overwhelming,

with a myriad of solutions and tools available to help support

and optimize initiatives and efforts, including email marketing

platforms, CRM systems, campaign management tools, data

analytics, and personalization engines.

MARKETING ACQUISITION TOOLS

1. Email

2. CRM

3. Loyalty

4. Personalization

DID YOU KNOW?

• It costs at least 6 to 7 times more to acquire a new customer than to retain and old one39

• Repeat customers generate between three and seven times higher revenue per visit than first-time visitors40

OUR TAKE: Retargeting for Retention

Retargeting (covered in the previous chapter) also applies to marketing retention. Marketers leverage

retargeting display ads for visitors or customers that have already been acquired via paid or earned media

to re-engage them and drive return traffic by promoting specific products or product categories.


Email Marketing

With its low barrier to entry with respect to cost

and effort and its high return on investment, it

is not surprising that email remains the most

popular channel for focusing retention efforts. As

a retention-marketing tactic, email provides a way

to communicate with current customers, build and

maintain relationships, and focus on increasing

customer lifetime value.

Most email service providers feature user-friendly tools that allow marketers to leverage the system without IT

involvement. Integrating the email marketing platform with the digital commerce platform and other technology

solutions in the ecosystem that provide insight into inventory, product data, and customer profiles is key to

a successful marketing retention strategy. Modern email marketing platforms also leverage machine learning

and other techniques to automate personalization and learn about the customer and her brand interactions.

Make it Personal

Personalizing email can be as simple as messaging

for customer segments, personalizing subject lines,

inserting a personal greeting with a customer’s

name, or using simple, automated trigger emails,

such as for an abandoned shopping cart, post-

purchase review prompts, and timely reorder

emails for consumables. On the other end of the

spectrum, email personalization can be as sophisticated as fully personalized email campaigns populated

with content and products based on individual customer behaviors, targeting based on device preferences,

weather and geography, and messaging relevant to cross-channel behavior.

DID YOU KNOW?

Nine in 10 marketers in North America use email

to engage their audience and email marketing

is consistently rated as the marketing tactic

with the highest ROI.41

DID YOU KNOW?

Personalized emails generate up to 6 times

higher revenue than non-personalized emails.42

PERSONALIZED EMAIL MARKETING CONTINUUM

Personalized greetings, subject lines

Triggers based on online actions

Personalized content and offers

Triggers based on omnichannel

actions

Personalized content based on geo, weather,

time of day, etc.

Basic Sophisticated


Triggered Emails

Triggered email strategies are vital ingredients of

any good retention strategy. Emails triggered by

customer activity on a retailer’s site can be highly

productive and profitable. These effective emails

can be used to drive traffic back to the site, close a

sale, upsell or cross-sell relevant items, etc.

There are many different types of campaigns that

utilize data and personalization to drive engagement,

loyalty and sales. The goal of these campaigns is

to encourage existing customers to come back for

more content or information, including:

• Welcome Series – start off the customer

relationship with targeted and relevant emails.

Go beyond just one email and develop a series

of emails.

• Post-purchase series – make the customer feel

good about her purchase and encourage customer

to review purchase and share product photos.

• Recommendations campaigns – recommend

complimentary products to recent purchase.

• Cart abandonment campaigns – remind the

customer of cart item, make recommendations

for alternative or additional items.

• Browse abandonment campaigns – show

customers what they recently browsed, products

or categories.

• Anniversary/birthday/milestone campaigns –

make customers feel good and offer an incentive

to shop.

• Re-activation/win-back campaigns – remind

customers of brand and encourage them to come

back.

SEEN IN THE FIELD

REI taps into their customers’ love for the

great outdoors with engaging imagery and

relevant content that extends beyond just

the products they sell.


• Lapsed/Never Purchased Series – remind shoppers of previous interests in a product

• Replacement/Replenishment – engage customers with reminders for when it is time to replace or

replenish a product (e.g., socks, underwear, t-shirts, etc.)

CRM

CRM, or customer relationship management, is a

customer-centric approach to doing business. It

is the overall strategy by which retailers collect,

record, manage, and apply customer data to engage

customers across all channels. CRM strategies

are most effective when they are applied and

implemented across all functional groups of an

organization.

A CRM database houses all relevant customer data

and profile information that enables the complete

view of all customers and to easily access, analyze,

and apply customer data to deliver personalized

experiences across all touchpoints. In addition to

online marketing, this could include in-store sales

associates and customer service as well.

OUR TAKE: Devices matter

When it comes to email marketing, 49 percent of all emails are opened on mobile devices.43 Design with

delivery formats (mobile, desktop, tablet) in mind. Work with your email partner and creative to deliver emails

based on optimized formats. Emails optimized for mobile greatly increase conversion, sales, and ROI.

SEEN IN THE FIELD

Total Wines delivers personalized emails with a gift ($5 off) for customers’ birthdays. Leveraging self-

entered customer birthday data, the retailer is able to build loyalty and let customers know that Total Wine

appreciates their customers.


Leveraging a CRM solution, organizations benefit

by being able to get a 360° view of their customers

and react accordingly – knowing the customer,

engaging with the customer and delivering the

expected experience. This includes:

• Cross-device identification

• Anonymous user tracking

• Customer response and behavior tracking

• Customer lifecycle analytics

• Advanced modeling and segmentation

Given the massive amounts of data that the online channel brings, combined with mobile data such as geo-

location, the reliance on data to tell marketers what to do is greater than ever, and a solid CRM strategy and

solution is necessary.

Loyalty Programs

Loyalty programs reward frequent customers and encourage one-time buyers to return to the website

and store. Rewards often include free merchandise based on points, special coupons or discounts

and access to products and events. Loyalty programs allow retailers to leverage insights to segment

customers based on similar needs to offer more relevant and personalized experiences, resulting in

higher conversions and loyalty.

Loyalty programs are a way for organizations

to say ‘thank you’ to their customers and show

value to them while also giving them an incentive

to continue returning and building lifetime value.

Loyalty programs are not one-size-fits-all and are

not right for all business models. Retailers can

leverage a loyalty rewards program to support

a differentiated brand engagement and execute

through online, mobile and marketing.

There are several types of customer engagements

that can be encouraged with a loyalty program:

DID YOU KNOW?

Artificial Intelligence already powers many CRM

functions and is leveraged to improve a myriad

of business functions ranging from email

marketing to forecasting and customer service.

DID YOU KNOW?

Nine in 10 internet users say they would

welcome an individualized experience where

a retailer would automatically suggest, or

even order, products for its loyalty program

members, based on a personal profile.44


• Site Engagement including consumption

of content article/guide/video, taking a

quiz, responding to surveys

• User Generated Content such as tips and

tricks, advice, ratings and reviews

• Open emails and push notifications

• Completion of personal profile

• Posts to Social Media and engagement

• Store events visits

• Purchases

When executed effectively, loyalty programs

can be a significant driver of revenue. Studies

have shown that customers are even more

likely to make frequent purchases if they

are close to reaching the threshold for a

reward or gain points or discounts for future

purchases.

SEEN IN THE FIELD

Sephora offers points for every dollar spent via their Beauty Insider program. There are different tiers of

loyalty where benefits increase when customers reach certain spending thresholds. The first tier requires no

spend, only an email address. The program is very clear and easy to follow and provides many benefits for

loyalty members with offers that are important to them, including a birthday offer, expedited shipping, free

items, and makeovers.

OUR TAKE: Say ‘Thank You’

Following you on social media, participating with UGC content, or referring a friend to sign up for email are all

new ways that customers can engage with your brand. Say ‘thank you’ and reward them for these activities. It

will pay off.


Retailers can also create special programs that focus on rewarding their best customers to foster brand

loyalty and boost the customer retention rate. Not always monetary in nature, the rewards can include

offers of special discounts, early access to sales, and invitations to exclusive events. The reward program

should aim to make a retailer’s best customers feel valued.

Some organizations partner with other companies to provide all- inclusive loyalty program offers. Strategic

partnerships for customer loyalty programs can be a very effective way to retain customers, and at the same

time, expand reach. These types of programs provide customers with added value that is relevant to them.

Personalization

By tailoring messages or offers to individuals based on their actual behavior, retailers and brands can deliver

a customer experience that is well-aligned with the customer’s specific needs and preferences.

We live in an era of instant gratification in which customers are bombarded with messages 24/7. Relevance is

of utmost importance in order to resonate with the audience. Personalization will increase engagement and

loyalty and help achieve a stronger return on investment of marketing dollars.

Successful marketers make it a priority to gather

and use behavioral data to find customer groups

and gain insight into their purchase behaviors.

Then, they take the time to understand these key

customer groups and map the customer journey.

By building the customer journey, micro-segments

and interaction points will become evident.

OUR TAKE: Omni-proof your loyalty program

Many shoppers engage with brands in multiple ways – online, mobile, and in-store. Make sure that customers

can use the program across all channels.

OUR TAKE: Use your data

Using customer and behavioral data to target customers with the best products and offers will help to

increase their loyalty. Retention strategies, specifically email, involve CRM (customer relationship marketing)

and targeting the best customer at the right time with the best message.

DID YOU KNOW?

71 percent of shoppers are frustrated with the lack

of personalization in their shopping experiences.45


Personalization is best thought about as a two-way

street. Customers provide information about their

desires, needs, and intentions through purchasing,

browsing, and social media. Marketers should respond

with relevant and timely messages that are triggered

and sent to the individual customer.

In order to scale personalization, data and technology

have to be in place. Once personalization is started, there

will quickly be a near-infinite number of personalized

variations of experiences which can be delivered to

the customer. A well-mapped process, combined with

artificial intelligence and automation technology, is

important for personalization strategies to be successful.

Which Criteria About Their Visitors Do USCompanies Use to Personalize the Experience?% of respondents, March 2019 · Source: eMarketer, April 2019

Campaign Source

Pages/content viewed

Email opens

Products Purchased

0 10 20 30 40 50

49%

35%

34%

33%

Demographics

Email clickthroughs

Clicks

Geolocation

32%

30%

28%

32%

Stage of customer journey

Previous visit(s) behavior

27%

26%

SPOTLIGHT ON DATA

Research consistently proves that personalized, relevant and timely communication leads to deeper customer engagement. Retailers that center their marketing retention strategies around data typically see the highest return on their investments.

In today’s digital world where customers interact and engage with retailers through a number of digital channels, retailers have greater access to valuable customer data.

With the right tools in place, capturing and leveraging data such as demographics, customer journey stages, purchase history, email opens and click-throughs, website behaviors, geolocation etc., marketers can create highly personalized programs and optimize their marketing retention activities across all channels and convert to greater sales.

A centralized and single view of all customer data is critical. Supporting data-driven marketing with more advanced technology such as AI and machine learning can automate otherwise manual tasks, making the process easier and more effective, and freeing up marketing teams to focus on more creative tasks.

Selling–

Digital shopping is evolving at lightning speed. Yesterday’s innovative

technology is tomorrow’s standard practice. As digital commerce

sales continue to grow and take a greater share of overall sales,

customer expectations are continuously elevated. To keep pace,

retailers must constantly stay on top of customer behaviors and

preferences as well as digital commerce technologies.

Selling | 67 © 2019

BURNING QUESTIONS

• What are best-practice features for digital commerce platforms?

• When should I consider re-platforming?

• What features are best practice for my industry?

Retailers should always take time to study best

practices and future trends for ecommerce, mobile,

and omnichannel to inform technology requirements.

Armed with industry insight, they should stay on

top of the platforms they leverage to ensure that

providers keep pace with industry best practices and

are in front of new and innovative functionality.


The platforms used to enable online shopping have

undergone one of the most significant technological

evolutions in recent times. Starting as basic web

catalogs and simple shopping carts, modern

platforms and solutions have received a dramatic

facelift, and in some cases even a name change.

Many technology providers are shifting the positioning

of their solutions away from ecommerce to digital

commerce, and rightfully so. Modern platforms

power much more than ecommerce (or at least should) including mobile commerce, kiosks, and virtually

anything digital. Many platforms also offer capabilities to power omnichannel retail – hence the shift from

Ecommerce or Digital Commerce to Omnichannel, Unified Commerce. Or even “No Channel Commerce”.

Technological advances and trends, including omnichannel retail, mobile shopping, and global expansion

are dictating changes and prioritizations in the digital selling space, while traditional sales channels such as

print catalogs are nearing extinction.

DID YOU KNOW?

Globally digital sales are expected to near 6

trillion by 2022.46

SELLING TOOLS

1. Ecommerce/Digital Commerce Platforms

2. Mobile Commerce

3. Conversational Commerce

4. Cross-Border Commerce

Selling | 68 © 2019

Ecommerce/Digital Commerce Platforms

The ecommerce technology industry started with only a handful of platform providers vying for retailer

attention. Today as the industry reinvents itself, the competitive landscape looks very different, with a wide

range of platform providers competing on functionality, deployment model, ease of use, specialization,

and (of course) price. Many of these platforms started out as consumer retail platforms but have evolved

to include core B2B functionality as well. Also emerging are platforms that are specialized by industry,

offering functionality to address specific, often complex, industry requirements.

Launching a new ecommerce site or re-platforming an existing site is a strategic business decision with

many implications across the entire organization, including Marketing, Ecommerce, Merchandising, IT,

Operations, Finance, and others. It is a big commitment, and it is important to get it right and understand

when such an implementation is a strategic necessity.

OUR TAKE: Do your homework

Whether launching a new business, re-platforming, or expanding into a new channel or global market, the

options for digital commerce platforms are seemingly endless and potentially overwhelming. Many platforms

look good at first glance. But, once you compare them to your requirements, to each other’s cost, and talk to

their customers, there will always be a top group that should be reviewed further. Eliminate the rest.

THE FOLLOWING QUESTIONS SERVE AS A FILTER IN DETERMINING WHEN IT’S TIME TO LAUNCH OR RE-PLATFORM

» Can your commerce site take you where you need to go?

» Are you falling behing the competition?

» Are you missing key benchmarks by not adopting best practices?

» Poor integration between channels – are there too many hurdles to clear?

» Have internal costs become too high, or unsustainable?

» Are you making a strategic change, e.g. new product types, acquisition, expansion into foreign markets?

» Are you experiencing performance or security risks?

» Are you experiencing an uptick in customer issues?

» Is it difficult to pivot and adapt to changing marketing conditions?

Selling | 69 © 2019

OUR TAKE: Validate need. Define requirements.

Validating your need for new technology is the first step. Defining your requirements comes next. Perform

thorough due diligence to understand your immediate functional and long-term business requirements, and

consider which deployment or delivery model is the best fit for your organization. Map all of these business

requirements to an ecommerce technical strategy.

Choosing the Right Deployment Model

Digital commerce platforms can be deployed in a variety of models:

On premise

• Software and hardware are licensed and hosted by the retailer either in their location or a hosting facility.

The retailer manages the infrastructure, operations and upgrades and has the responsibility and control

of security and privacy.

Software as a Service (SaaS)

• The SaaS platform is a subscription model, hosted either in the cloud or by the ecommerce platform

provider inside their hosting environment. The provider manages the hardware and software and is

responsible for upgrades.

Private Cloud or Managed Hosted

• Software hosted in the cloud, with cloud environments such as Amazon, Azure, Google, Dimension Data

or other hosting facilities. The provider manages the hardware and the software is managed by the

retailer, provider or a combination of both.

Platform as a Service (PaaS)

• Hosted in the cloud, the provider delivers hardware and software tools allowing retailers to develop,

run, and manage applications without the complexity of building and maintaining the infrastructure.

Finding the optimal digital commerce platform is a combination of feature, function, and delivery model.

Organizations need to consider and evaluate the various delivery or deployment models available.

Selling | 70 © 2019

While there is no magic formula to selecting the right model, there are several key considerations, including:

Internal Capacity

• Level of internal capacity for development, maintenance, and support.

Long-term goals, strategic priorities

• The need to ensure the level of commitment required of the platform fits overall strategic priorities.

Potential disruption to the business

• Choice of delivery model and implementation partner will directly affect the level of effort required of

the retail team.

Digital Commerce Platform Capabilities

Once basic order-taking platforms with limited functionality, modern digital commerce platforms include

functionality that stretches far beyond online catalogs and shopping carts, offering features and functions

designed to provide the best customer experience possible and user-friendly tools to easily manage the

platform.

With a clear understanding of customer characteristics and a detailed merchandising strategy (what to sell

and how to sell it), organizations can start to determine baseline functionality needed and the features that

will set their sites apart from the competition.

DIGITAL COMMERCE PLATFORM BEST PRACTICE FUNCTIONALITY

SEO Social Content Blog Personalization

A/B Test Promotions Bundling Catalog Pricing

%

Selling | 71 © 2019

When evaluating digital commerce platforms, it is essential to understand which features and capabilities

are included. Some providers offer a bundling of features and best-of-breed capabilities beyond standard

functionality, while others have an ‘à la carte’ approach. In addition to looking at the feature sets, if features

are a la carte, the implementation costs can vary.

Beyond standard capabilities, some of the typical best-of-breed features include:

Major Systems

CMS, OMS, PIM, B2B, DAM

Additional Features

Faceted search, dynamic product sorting, segmentation, advanced personalization

Depending on the platform, these added features may be offered as part of the solution or as easy add-ons

offered by third-party technology solutions.

In addition, API (Application Interfaces) which make integrating to external support services such as payment

gateways and shipping aggregators can make the difference between a low maintenance and a high

maintenance platform.

OUR TAKE: Identify your requirements, validate their importance.

The single most important step in selecting a platform for your ecommerce needs is to define all your

detailed requirements and decide what you must have versus what you can live without or add later. It’s

important to identify which requirements will have a significant impact on your business or highest ROI

(return on investment). Having the best new widget is great, but if it is very expensive and only leads to a

small improvement in sales, it may not be worth it. Remember to assess widgets against what is necessary to

support best practices for your industry. Which features are really required?

OUR TAKE: Think ahead

Determining core features, such as navigation, search, recommendations, social, and content management,

are but a handful of the hundreds of decisions you’ll need to make when defining your current requirements.

But you also need to think ahead and determine those innovations that will emerge to become a focal point

for digital commerce tomorrow. Which will become irrelevant next year? How can you keep up with change?

Do your own research and leverage the exposure to technology and service providers during the process as

an education on best practices and future innovations.

Selling | 72 © 2019

Other considerations when selecting a digital commerce platform

Many organizations rely on the Total Cost of Ownership (TCO) when selecting a digital commerce platform.

However, comparing platforms solely on price, overlooks the comparative value that one platform can deliver

over another. It is imperative to include both cost and value throughout the evaluation process to effectively

calculate a comprehensive return on investment.

Considerations to determine value:

• Time-to-market

• Scalability and flexibility

• Ease of use

• Efficiency of execution, maintenance, and adoption of new innovation

• Culture

• Community

• Revenue uplift from improved conversion, retargeting and increased sales through omnichannel

capabilities

• Integration of AI (Artificial Intelligence)

• Integration of basic merchandising capabilities, including assortment management

DID YOU KNOW?

One of the most important digital iniatives for 2019 is reducing technical debt. Replacing an outdated and

under-performing ecommerce solution can be a critical step towards reducing technical debt.47

OUR TAKE: Integration is no longer an option; it’s a necessity

Make sure your digital commerce platform can integrate with all your business functions, internal systems

and third-party tools. Your systems must be integrated and able to accept orders, confirm them, process

payments, decrement inventory, print shipping labels, create a pick order, generate reports, and update your

financials without manual intervention. Even if long-term, you should always be working toward this goal.

Selling | 73 © 2019

It is important to understand and evaluate all the components of value offered from a variety of technology

solutions and how they stack up against each other.

Empowering Internal Teams

The technology and tools used to enable digital commerce should not be limited to technical power users.

Advanced platforms empower everyone – even those with creative functions – to use the system without

relying on IT. As a result, they can more efficiently and quickly shape the shopping experience. Streamlined,

collaborative workflows and automation can greatly extend the work capacity of a lean digital commerce

team, making it easy to:

• Collaborate and release all site-related changes in an orchestrated manner

• Enable A/B testing

• Ensure your team can work quickly and track activities individually or as a project

• Enable your teams to re-use content

• Make minor modifications easily

• Know who last worked on an activity or asset

• Communicate asynchronously about all site-related elements

• Notify and alert teams and individuals about site changes or issues (such as missing images for a product

being prepared for publication)

• Schedule site changes including pricing, promotions, featured items and other content in advance and

preview the site as it will appear on any date

• See data insights in the context of actions and tasks

• Enable intra-day feedback and reporting on site sales

• Full reporting suite or integration with analytics

• Easy integration with CRM solutions or ability to store and use customer information appropriately

Powering Omnichannel Retail

Enabling seamless movement across channels requires a unified view of the customer and coordination across

all customer touchpoints. To arrive at this view, organizations need to assimilate all the data they can collect

Selling | 74 © 2019

across channels, including customers’ online behaviors and browsing history, in-store and online purchases,

inventory, promotions, social media interactions, and more. To fully embrace an omnichannel retail approach,

the digital commerce platform must be fully integrated with all other systems in the technology ecosystem,

and it must be able to capture all data and feed it into a centralized database that can be leveraged across

the entire organization.

When fully integrated, digital commerce platforms that include omnichannel capabilities can enable services,

such as:

• Buy online/pick up in-store (BOPIS)

• Buy online/return in-store (BORIS)

• In-store inventory lookup

• Buy in-store/ship to home

• Cross-channel loyalty programs

• Cross-channel gift card redemption

DID YOU KNOW?

Over 60 percent of shoppers will use Buy online/

pick up in store (BOPIS) in 2019, but this feature

is only adopted by between 27 and 41 percent of

retailers, depending upon vertical.48

Selling | 75 © 2019

Mobile Commerce

Perhaps one of the most significant and fastest-

growing advances in ecommerce in recent years is

the ability to browse and shop on a mobile device

(site or app). Nearly all leading retailers in the US

have mobile-optimized sites. Responsive design

has become a standard in today’s digital commerce

platforms, leaving no excuse for those retailers that

are not yet optimized for mobile.

Beyond optimizing the ecommerce site for mobile screen sizes, retailers should ensure that their site is also

mobile-user friendly by following best practices, including the following areas:

• Optimized load time

• Simplified navigation

• Mobile-friendly design – less is more

• Saved carts between platforms

• Easy payments

• Visual search

• Speed!

To App or Not to App

Mobile apps are less popular than mobile-optimized sites among retailers – most studies reveal that

conversions are higher on mobile sites than on apps. Apps are also more expensive to develop and maintain.

While it is recommended that mobile apps leverage the same digital commerce technology and system for

ecommerce, most apps require additional mobile commerce solutions or custom development.

DID YOU KNOW?

• In 2022, mobile commerce sales is estimated

to reach $512 billion and take up more than 55

percent of total retail ecommerce sales.49

OUR TAKE: The great connector

‘Mobile sales’ is just one aspect of mobile within retail. The greater power of mobile arises from its influence

on overall shopping – bridging online and offline experiences. Mobile drives traffic to stores and literally puts

product information directly into the hands of the shopper. The shopper’s journey traverses across multiple

mobile and desktop devices on the way to an order.

Selling | 76 © 2019

Conversational/Voice Commerce

By some estimates more than 1.6 billion people will use voice assistants such as Alexa, Google Home and

Siri on a regular basis by the end of 2021.50 Still in its infancy, voice commerce, today, is generally best for

ordering replenishment items. In fact, Echo owners increased their purchase of replenishment products like

diapers by 13.5 percent in 2017. Both Amazon and Google are expanding their fight for industry leadership

into smart-TVs. From now until 2024, smart TVs with voice assistants are projected to grow at a compound

annual growth rate of 121.3 percent compared to 41.3 percent for smart-speakers.

As more and more consumers start using voice-

activated assistants to find and research products,

conversational commerce or voice commerce will

eventually influence the entire digital shopping

experience. Some organizations are already

experimenting with voice commerce, others

should start to look at how voice fits into their

customer journeys so they are ready for a voice-

enabled reality in the not-so-distant future.

Global

One of the unique advantages of digital commerce is the ability to broaden reach without needing to set up

shop abroad. Even though it is possible to practically sell everywhere via the online channel, there are certain

factors to consider when selecting an ecommerce platform with global capabilities.

Some platforms are better equipped than others for cross-border marketing, merchandising, and shipping. If

you’re testing your way into multiple foreign markets, a model that allows you to easily expand your footprint,

relatively quickly, versus building individual country or regional sites from scratch, may be desirable. Some

platforms now have native functionality to support international digital commerce.

Before expanding globally, organizations should investigate their platform provider’s capabilities, as some

platforms do not support global ecommerce. If a solution cannot support international capabilities, third-

party providers can run international ecommerce sites and help manage fulfillment and order shipment.

It is also recommended to partner with System

Integrators (SI’s) and fulfillment partners with

experience dealing with the complexities of global

commerce. Taxation, export restrictions, local

cultures and privacy regulations such as The EU

General Data Protection Regulation (GDPR) require

careful consideration when contemplating a move

to international commerce.

DID YOU KNOW?

Alexa is by far dominating “home voice” in the US,

but Google is aggressively pushing into the market

in partnership with Walmart and Target. With more

than 8 billion devices, Alexa, Google, and others, in

use, voice shopping will continue to grow.

DID YOU KNOW?

Global retail ecommerce sales are forecasted to

surpass $4 trillion by 2020. Equating nearly 15

percent of total worldwide retail sales.51

Selling | 77 © 2019

SPOTLIGHT ON DATA

Selling is essentially all about data. One of the advantages of digital commerce is the ability to easily capture data. Retailers should ensure that the platforms they use are able to capture data, integrate with other platforms in their ecosystem and leverage the data to optimize the customer experience and boost conversions.

Specifically, retailers should support their selling efforts with the data and sources listed below:

• Product data: SKUs, attributes, prices, descriptions

• Forecast data: which products are in demand, demand planning, and assortment planning

• Assortment data: which combination of products creates the best experience for shoppers

• Order data: how many orders, tracking, and monitoring

• ERP, OMS, PIM, WMS data: enabling consistent product and order data to flow through the retail and ecommerce digital pathways seamlessly

• Location data: GEO IP address location information to identify where a shopper is and thereby suggest what types of products they may be interested in

• Shipping data: what percentage of customers leverage same day or next day shipping

• Marketing data: what are the click-through and open rates, attribution data

• Personalization data: necessary to suggest and recommend products or to ensure the customer has a personlized landing page

• Analytics and reporting data: if you care about it; measure it. When product and order data are moved smoothly through ecosystem, reporting on critical business functions becomes possible.

Marketplaces–

Marketplaces are becoming increasingly important selling

and marketing channels for retailers and brands. Driven by

demands for greater convenience, shoppers turn to these

one-stop destinations to both research and buy products.

SPONSORED BY

Marketplaces | 79 © 2019

BURNING QUESTIONS

• How can I improve sales on Amazon?

• What’s new in online marketplaces?

• Should I launch my own marketplace?

Worldwide, marketplaces accounted for 52 percent of global online sales, reporting $1.8 trillion in online

sales in 2018.52 In 2018, Amazon alone captured half of total ecommerce sales in the US. Still, that figure pales

in comparison to the dominating position that marketplaces own in Asia-Pacific. Alibaba has operations in

over 200 countries and its online sales have surpassed those of Walmart, Amazon, and eBay combined

since 2015.

All trends indicate that marketplaces are poised to continue taking up a larger percentage of ecommerce

over the next two to three years. Retailers should already have a marketplace strategy in place, or at the

very least, be working on one, to expand reach, enhance sales and benefit from the retail technology

innovations that many marketplaces offer.

THE MARKETPLACE TRIFECTA

Value

Marketplaces such as Amazon or Jet drive lower prices and greater value

for shoppers

Product Selection

Large marketplaces offer huge product selections (Amazon has over 300MM SKUs) while niche

marketplaces offer curated product selections for specific categories

Convenience

Amazon Prime with One Day Free Shipping provides the ultimate

convenience to consumers

DID YOU KNOW?

A Marketplace is an ecommerce platform that enables merchants as well as individuals to list their items for

sale or establish online storefronts and leverage the platform and its services. These include search, product

information, transactions, payments, order management, and sometimes even fulfillment. Because of the

larger number of sellers in a marketplace, the consumer benefits from greater product selection in one place.



Most people associate marketplaces with Amazon,

but Amazon is not the only marketplace that retailers

and brands should consider when developing their

marketplace strategies. Different types of marketplaces

are extremely important when expanding globally

and targeting specific audiences. There is also a

significant opportunity for retailers to launch their own

marketplaces to increase assortment, keep customers

longer, and thereby increase sales and engagement.

Although a solid marketplace strategy can significantly increase profitability, some stay completely clear of

marketplaces, while others struggle to find the optimal balance and approach. It can be beneficial to align

with a partner that specializes in marketplace strategies and execution.

There are several solution providers that make it easier for organizations to publish and manage marketplace

listings and execute marketing tactics. Some digital commerce platforms offer application plug-ins and

extensions to help connect to marketplaces. There are also specialized software integrators or data feed

managers/aggregators to connect and manage multiple marketplace accounts or data feeds.

MARKETPLACES

1. Amazon

2. Global

3. Retailer-operated

4. Niche/Vertical

OUR TAKE: It is OK to double dip

You should leverage marketplaces to increase your domestic and international sales and learn from them.

It is impossible to ignore the impact marketplaces have on the industry so better to embrace a marketplace

strategy while strengthening owned channels.

2018 ONLINE MARKETPLACE SURVEY

$1.66 trillion spent globally on the top 75 online marketplaces

Marketplace sales account for 52% of global online retail sales

$525 billion sold on US marketplaces

Source: Internet Retailer 2019 Marketplaces Report


Amazon

Part-marketplace/part-retailer Amazon has dictated and shaped the overall commerce landscape, impacting

both online and offline retail. This retail Goliath is showing no signs of slowing down and grows stronger every

year. Larger retailers like Best Buy and Kohl’s have been wary of partnering with Amazon in the past but they

are now testing new initiatives by selling certain product lines on the marketplace and accepting in-store

returns on Amazon purchases to drive more foot traffic and increase sales in their brick-and-mortar stores.

Organizations should look for smart ways

to leverage Amazon as a channel to

increase reach and sales. Those who want

to avoid a full-fledged launch on Amazon

can build a strategy that complements

their business model. For instance,

some sell selectively on Amazon, with

only a few product categories instead

of the entire product catalog. Some

also opt to leverage Amazon’s global

fulfillment network, enabling them to

take advantage of Amazon’s distribution

centers to minimize delivery times.

Amazon Marketplace Web Service (Amazon

MWS) is an integrated web service API that helps

Amazon sellers programmatically exchange data

on listings, orders, payments, reports, and more.

Data integration with Amazon enables high levels

of selling automation, which can help sellers grow

their business.

SEEN IN THE FIELD

Kohl’s announced that starting July 2019 all stores (more than 1,150 locations across 48 states) will be

accepting free, convenient, unpackaged returns for Amazon customers. Kohl’s will accept eligible Amazon

items, without a box or label, and return them for customers for free, providing additional service and

convenience to Amazon customers. Amazon Returns at Kohl’s creates convenient locations for Amazon

customers to return eligible Amazon.com merchandise to their local Kohl’s store. Kohl’s will also expand its

product relationship with Amazon by carrying Amazon products in more than 200 stores.53

DID YOU KNOW?

In 2019, the U.S. ecommerce market will be

dominated by Amazon ($317 Billion). This is more than

half of ecommerce spending in the U.S. (52 percent).


Global

When it comes to global expansion, the first step for most brands is marketplaces. Marketplaces dominate

ecommerce in large markets in Asia-Pacific and offer a low-risk opportunity to expand reach and gauge

market expansion potential before investing in a broader global expansion strategy. In Asia-Pacific,

marketplaces such as Rakuten in Japan, Taobao and Tmall in China and Lazada in South East Asia, are

extremely important. In China alone, 90 percent of business-to-consumer ecommerce sales originate from

marketplaces, with over 50 percent dominated by Tmall.

Retailer-Operated Marketplaces

Most organizations leverage marketplaces to expand reach, while others launch their own marketplaces to

combat competition. Perhaps the greatest advantage of launching a retailer-operated marketplace is the

OUR TAKE: Amazon the search engine

Some studies suggest that over 50 percent of product searches start on Amazon, surpassing, Google as

the top destination for shopping research. Rather than looking at Amazon as a competitor, look at the

marketplace as a search engine and an integral part of your marketing mix.

OUR TAKE: Dip your toes in the global pool

Use marketplaces to tap into an already-established customer base in global markets. Entry into new

markets using a marketplace strategy is a low-risk approach. What do you have to lose?

DID YOU KNOW?

Singles’ Day is a Chinese holiday started by a group of students at Nanjing University in 1993 to celebrate

being single. The date, November 11th (11/11), was chosen because the number “1” resembles an individual

who is alone. It wasn’t until 2009 that Alibaba spotted an opportunity and encouraged retailers on its

platform to offer discounts for the day and transformed Singles Day into the largest online shopping day

in the world.


ability to expand product assortment without the

restraints of adding more inventory and managing

distribution. With a retailer-owned marketplace,

retailers can gain additional revenue streams by

offering a broader product assortment.

Launching a marketplace is not a viable strategy

for every organization. Online marketplaces

have complex ecosystems and require the right

technology and resources to achieve success.

Gaining recent popularity, a few platform providers

have emerged, offering technologies and services

to help power these retail-operated marketplaces

including vendor onboarding, product catalog

integration, order routing and regulatory compliance.

REASONS FOR LAUNCHING A RETAILER-OPERATED

MARKETPLACE

• Filling in assortment gaps

• Reduced inventory/markdown risk and costs

• Offloading shipping costs

• Improved relationships with vendors/suppliers

Niche/Vertical Marketplaces

While Amazon, eBay, Alibaba, and Jet.com typically get the most attention, there are several niche and

vertical marketplaces that can help retailers and brands expand reach such as Lyst, Houzz, Orchard

Miles and Wanelo. Typically, these smaller marketplaces are specialized vertical platforms that target a

specific audience looking to purchase a specific item or category of products. They offer different fee

structures from larger marketplaces and more differentiated services such as marketing support. These

smaller marketplaces provide the opportunity to reach a highly-engaged target audience through curated

experiences, often integrating content and social media elements into the shopping experience.

In recent years, there has been an evolution of product directories with an affiliate business model,

inspirational content sites, or even quasi-social media platforms that are turning their sites into transaction-

enabled marketplaces.

SEEN IN THE FIELD

For retailers such as Staples, with product

categories that are highly competitive

with Amazon, expanding into non-core

product categories through the launch

of a marketplace is a potential life-saver.

Since launching its marketplace, Staples.

com has expanded its product selection

by 400 percent.54


SPOTLIGHT ON DATA

Marketplaces present a significant opportunity for retailers and brands to expand reach and meet demands of today’s consumers. Marketplaces are also great channels for testing demand in new markets. The data used to run and manage a marketplace business is basically the same (and just as important) as the data used to run a digital commerce business. Retailers should consistently capture and analyze the data below to optimize sales, reach and customer engagement:

• Product selling - promote best sellers, markdown or remove poor performers

• Inventory - make sure you have enough weeks of supply to fulfill projected demand

• Marketing - depending on the marketplace, such as Amazon, you can promote your products and track your ad spend and ROI

• Customer satisfaction percentage

• Merchandise fulfillment percentage

• Overall profits and losses - you want to make sure you are tracking your sales and managing your expenses so the marketplace is profitable

SEEN IN THE FIELD

Prominent in the home

décor space, Houzz delivers

curated content and

products. Initially a home-

improvement app, today, it

allows users to purchase the

products featured on the

website and app.


It’s no secret that consumer behavior is evolving.

Today’s consumers have more choices than ever

when it comes to discovering, purchasing and

receiving products. And as a result, they’ve become

more demanding.

Many of these modern expectations have evolved

from their experiences on marketplaces like

Amazon: Endless choices. Low, competitive prices.

Easy checkout. Fast, free shipping.

This ever-evolving consumer behavior is driving

much of the innovation we see across the

e-commerce landscape, as well as the responses

made by leading brands and retailers: smarter

advertising, optimized listings and speedier

fulfillment.

In some ways, Amazon — and other similar

marketplaces — represents a perfect microcosm of

the entire e-commerce space.

But every e-commerce innovation and opportunity

— on Amazon and beyond — still revolves around

one thing: the empowered consumer. If you aren’t

taking steps to understand how your potential

customers are searching, shopping and buying,

you’re probably falling behind.

That doesn’t mean optimizing one or two marketplace

strategies. It means taking a holistic look at how all

of your strategies are working together to deliver

the best experience for your potential customers. It

means putting consumers at the very center of your

advanced strategies across the full buying cycle —

from marketing, to selling, to fulfilling.

Turning Browsers Into Shoppers

With more competition vying for limited screen

space — especially when you consider the limited

space on mobile devices — there’s only so much real

estate for your products. Brands and retailers need

to create sophisticated branded and non-branded

strategies in their advertising campaigns to be seen

early in the buying cycle. That means constantly

testing, experimenting, measuring and tweaking.

Turning Shoppers Into Buyers

When it comes to selling — or, a shopper making

the decision to actually buy your product — content

is key. Optimizing listing content and automating

a dynamic pricing strategy will lead to more top

positions on marketplaces, create more visibility

and, ultimately, encourage more conversions.

Putting the Consumer at the Center of Your Amazon Strategy

PROVIDED BY


Turning Buyers Into Lifelong Customers

Fulfillment is the final piece of the purchasing

puzzle, and fast, inexpensive shipping options

have become standard. Every company’s business

model is different, so it’s up to brands and retailers

to choose what fulfillment model is financially

right for them and still allows them to provide the

most convenient shipping options to potential

consumers. Whether that’s self-fulfillment,

fulfillment by third-party logistics providers (3PLs),

fulfillment by marketplaces (FBA) or, most likely, a

hybrid of several fulfillment types.

Choosing the right partner is essential.

ChannelAdvisor offers one streamlined solution to

guide all of your most critical marketing, selling and

fulfilling activities.

Our comprehensive e-commerce platform collects

your product data once, and then relies on that

single feed to optimize performance across

hundreds of channels, including Amazon, eBay,

Google, Walmart, Facebook and more. As orders

and performance information flow back through

the ChannelAdvisor system, results are measured

and broken down to help you make better decisions

about your business.

It’s how we’ve empowered thousands of online

sellers — and why our name has been synonymous

with e-commerce growth for nearly two decades.

And it’s why we’ve been named the #1 marketplace

management provider to the Internet Retailer Top

1000 since 2013.

Maximize Marketing

Our unique blend of e-commerce expertise and

advanced technology means you’ll have everything

you need to engage with consumers at the most

critical stage of the buyers’ journey — offering the

right product, to the right consumer, at the right time.

Increase Sales

From stronger pricing strategies to more accurate

inventory forecasts, ChannelAdvisor equips you

with every essential tool and tech advantage

you need to win more buy boxes, stand out from

competitors and supercharge sales.

Optimize Fulfillment

Our integrations and advanced automation keep

you connected to a full range of fulfillment options

for faster, more affordable deliveries.

ChannelAdvisor makes it easy to compete and

manage all of your e-commerce activities from

one central platform. We help brands and retailers

integrate, manage, optimize and analyze customer

and product data across hundreds of online

channels around the world.

In other words, we help the marketing, selling and

fulfilling efforts of brands and retailers by keeping

the empowered consumer at the center of it all.

https://www.channeladvisor.com/about/news-events/press-releases/channeladvisor-named-1-marketplace-management-provider-to-the-internet-retailer-top-1000-for-seventh-year-in-a-row/

https://www.channeladvisor.com/about/news-events/press-releases/channeladvisor-named-1-marketplace-management-provider-to-the-internet-retailer-top-1000-for-seventh-year-in-a-row/

Order Management–

Even though it may not be as sexy as the digital commerce

platform or other frontend applications, the order management

system is really the brain behind the operations – especially in

omnichannel retail.

Order Management | 88 © 2019

BURNING QUESTIONS

• Do I need an order management system (OMS)?

• Can my ecommerce platform do the job?

• What features should the OMS include?

While frontend applications facilitate the customer interaction, the most important capabilities of the

omnichannel approach are driven by the backend. Order management is at the center of the customer

experience, supporting not only front-end order capture and customer service but also back-end order

routing and orchestration, fulfillment, payment captures and returns. Order Management systems help

retailers make intelligent decisions to better serve customers, optimize the use of inventory, and reduce

fulfillment costs.


Most retailers already use some order management functionalities as part of the digital commerce platform,

a home-grown solution, or the ERP. However, these solutions are often incapable of handling the complexity

of the purchasing and delivery options customers expect. Many retailers struggle with disjointed order

management processes and technologies, resulting in subpar customer experiences.

An order management system (OMS) provides the ability to automate and streamline the flow of the order,

from point of purchase to the customer. The OMS can process orders from multiple channels (ecommerce,

mobile, call centers, voice-activated home assistants, smart devices and more), allocate orders to multiple

sources of fulfillment (warehouse, drop shippers, retail stores), track the order to the customer and handle

return orders.

OUR TAKE: Order Management is Table Stakes for Retailers

Modern OMS must include advanced, cross-channel and cross-domain order processing functionality and

provide insight into critical data that can help you make better business decisions regarding merchandising,

returns, inventory, marketing, and much more. Distributed Order Management (DOM) gives your enterprise

and your customers access to inventory and services within the 4 walls of all your facilities and stores as

well as the long tail and backup inventory of partners and drop shippers.


Online Order Management

Most digital commerce platforms include “light” OMS capabilities. For smaller retailers, these capabilities

are often enough to handle online order management requirements. But, larger organizations with more

complex operations and order flows often find they can benefit from implementing an order management

system. To meet retailers’ needs, many providers of enterprise digital platforms have recently made

acquisitions to add OMS capabilities to their platforms or offer them as part of an integrated solution.

Retailers should map their business

requirements and analyze their current

platform capabilities to evaluate whether

they need to upgrade to a centralized

OMS system.

For online-only retailers most digital

platforms include capabilities that may

be sufficient. However, retailers that

manage multiple channels or multiple

facilities should consider investing in a

centralized order management solution.

For these organizations it is critical to

have visibility across channels through

metrics which link Available to Sell (ATS),

Sell Through, and Inventory status.

ORDER MANAGEMENT LIFE CYCLE

Capture Validate Source Authorize Fulfill Confirm Capture Service Return

OUR TAKE: It takes a village…

OMS is the heartbeat of your commerce success. Ensure that your entire organization is involved when

selecting and implementing an OMS. Aim for complete alignment - any department can sabotage the effort

if they’re not on board. Get the team together early and align their objectives.

OUR TAKE: Do you need an OMS?

We see much confusion regarding retailers’ need for

an OMS when they have an ECP, ERP, WMS, PIM, or

any combination of those systems. The answer is, “It

depends.” Take time to track inventory, map its journey

form the dock to the customer. In parallel, map your

customer’s journey from first connection through their

purchase. Then evaluate the capabilities of the systems

you have in place, document the gaps, and progress

from there. This exercise will help you determine your

need for an OMS and the specific type of OMS you

require, as they come in many different flavors.


Omnichannel Order Management

As shoppers demand more convenient and faster shopping

and delivery options, it is imperative for retailers to adopt new

omnichannel fulfillment options, including buy online/pick up

in-store, (BOPIS), ship-from-store, buy online/return in-store

(BORIS), and save-the-sale. Offering these options adds new

layers of complexity to backend operations – the processing

and management of orders as well as the management

of customer data, inventory levels, product information,

fulfillment data, and more. Managing these complex

workflows without the right systems and proper integration,

in most cases, leads to poor customer experiences that have

detrimental impact on sales and customer loyalty.

Organizations that deploy a full-featured OMS

will quickly benefit from more efficient backend

operations, allowing them to meet and exceed

customer expectations.

Why should you invest in OMS?

Modern retailers rely on smart order management

strategies to ensure their inventory is working

for them and not languishing in warehouses, in

backrooms, or sitting on shelves.

Leveraging an OMS for centralized inventory

management provides real-time inventory status,

ensuring that products are in stock for web, phone,

and brick-and-mortar orders.

Web, phone, mail-order, or in-person orders are all

processed by the same system, so nothing slips through

the cracks.

Intelligent order routing ensure that products are shipped

from the fulfillment center closest to the customer.

Advanced shipping integration combines in-house

fulfillment and shipping resources with built-in

connections to UPS, USPS, FedEx and more.

DID YOU KNOW?

More than 60 percent of shoppers

buy products online and pickup in-

store. From sandwiches to designer

shoes, customers expect the option

to shop online and the convenience of

immediate pickup in a local store.

SEEN IN THE FIELD

A large accessories retailer noticed that

nearly 60 percent of incoming calls to

their call center were related to order

tracking. By leveraging an OMS the

retailer gained increased visibility into

orders and, as a result, reduced costs

and increased customer satisfaction.


What to look for in an OMS

Closely tied to all aspects of retail operations, including the tracking and storing of customer data, processing

of orders, and allocation of order distribution, the OMS must include advanced cross-channel and cross-

domain functionality that enables retailers to manage the complexity of customer orders.

Multichannel order capture and processing

The ability to capture and process orders from multiple

channels, including an order that may start in one channel

and complete in another, is one of the most basic roles

of an OMS. Fundamentally, all orders for a customer

should be visible in the OMS regardless of the order

capture channel. The system should be able to process

both website and mobile orders. Store associates should

be able to process in-store transactions as well as place

OUR TAKE: Keep your promises

Your customers don’t care about channels, but they do expect fast delivery, buy-online/pick-up and return-

in-store options, cross-channel inventory look-up, and much more. Moreover, they expect a seamless and

consistent experience. Don’t let them down because your technology can’t do the job. By connecting the

digital commerce experience with the processes to ship and deliver on time – you keep your promises!

OUR TAKE: Integration is key

Ensure that your OMS integrates easily with your other retail systems. If integration is clunky and

cumbersome, the system has little value.

SEEN IN THE FIELD

A major sportwear manufacturer was experiencing performance challenges around holiday peaks. A

technology assessment revealed that the digital commerce platform, the OMS, and WMS separately were able

to handle high order volumes, but the systems were not properly integrated, causing the performance gap.

DID YOU KNOW?

46 percent of retailers offer the ability to

purchase in store and have items shipped

anywhere.55


online orders for customers on premise. Call center and live-chat representatives should be able to complete

or adjust customer orders. While the above may seem like basic capabilities, in order to accomplish complete

visibility, the OMS must be tightly integrated with all other systems in the retail infrastructure, enabling data

to be shared across all channels.

Inventory visibility

Integration between the OMS and all other retail systems is essential to enabling complete visibility across all

channels. Visibility into in-stock, in-transit, purchase order inventory, and drop ship partner and wholesaler

inventory is required to accurately provide

customers information on product availability. Once

integrated, the OMS acts as the centralized hub to

connect all information and provide visibility. This

is important, because customers expect the same

products to be available at all touchpoints and for

all channels to have access to shared inventory

information. For instance, if the retailer wishes to

offer “endless-aisle” capabilities, retail associates

should be able to look up inventory for an out-of-

stock item at all other physical and virtual locations.

They must also have the ability to fulfill an order from

any location or store for delivery to the customer’s

home or preferred in-store pick up location.

DID YOU KNOW?

• Buy online, pick up in-store” is considered

the most valuable aspect of the retail

shopping experience for more than four in 10

consumers.

• Nearly 50 percent of shoppers use buy

online, pick up in-store to avoid shipping fees,

followed by roughly 45 percent who use it to

save time by not having to shop in-store.56

SEEN IN THE FIELD

Nordstrom has found the winning

recipe for providing a seamless

experience and transparency into the

order process. If an item is not in stock,

the site alerts the shopper immediately,

offers to backorder the item if possible,

and provides information regarding

ship date. At the cart level, the site

offers an option for customers to easily

change the order to a pickup order.


Cross-channel order routing

The ability to route orders for fulfillment to various inventory distribution locations (based on business

rules and algorithms) is also critical. Retailers are increasingly using their brick-and-mortar locations as

secondary fulfillment centers to reduce out-of-stock situations, provide quicker product delivery, and

secure the most cost-effective shipping. Leveraging a centralized OMS that can facilitate cross-channel

order processing and routing enables retailers to optimize these benefits.

Order online/pick-up in store

Another popular option derived from customer demand is the ability to offer “buy online/pick-up in store”

and “reserve online/pick-up in store” capabilities. To facilitate this capability, the OMS must be able to

process the order from one channel, ensure that the product is available at the retail location, and provide

the necessary information to the retail staff so they can prepare the order for customer pick-up. This

option requires real-time updates of inventory levels to ensure the product is available at the store location

as well as timely and accurate communication

of the order flow from the ecommerce system

to retail associates to ensure that the order is

ready when the customer arrives. This feature

brings additional value via the cross-sell

and upsell opportunities that arise once the

customer is at the store location. To facilitate

this, the OMS should enable store associates

to access and adjust the original online order.

DID YOU KNOW?

The ability to buy-online/pick up in-store is adopted

by only 41 percent of retailers.57 Yet, over 80

percent of customers report buying online and

picking up in store.

SEEN IN THE FIELD

At Ace Hardware, orders

are ready for pickup the

same day if the order is

placed at least four hours

before the applicable

store closes.


360-degree customer view

Essential to providing a consistent customer experience is a unified customer database that gathers and

stores data from all touchpoints. Store associates, customer service representatives, and ecommerce

platforms and mobile applications must be able to access data about customer orders, purchasing

history, and preferences to enable

‘clienteling,’ accurate order tracking,

and personalized customer service. The

OMS should be tightly integrated with all

other systems to provide this complete

customer view as well as visibility into

customer data and corresponding

orders across all channels.

Promotions, product content information, and pricing

While some promotions will be exclusive to certain channels, there are advantages for retailers to honor

promotional initiatives across channels. Since customers do not distinguish between channels, they expect

to find consistent product information, imagery, and pricing, regardless of whether they are shopping on

their laptop, on a mobile device, or visiting a store. The OMS should allow all channels access to the same

pricing and promotional information which, for instance, could enable call center and store representatives

to honor the same pricing and promotional details as customers see online.

SEEN IN THE FIELD

Kohl’s began their pick-up-in-store initiative to enable customers to pick up their purchases at a local store.

The retailer soon experienced additional benefits and uplift in sales - between 15 percent and 20 percent,

because shoppers who picked up items in-store bought additional items while in the store.58 In addition,

Kohl’s recently partnered with Amazon as a convenient point of return, bringing additional shoppers

through the door with the anticipation of adding sales from customers who might not have otherwise been

part of Kohl’s foot traffic.

OUR TAKE: Centralize customer information

Customer management is as much a part of order management as any back-office logistics component.

Customer follow-ups, including order changes, tracking inquiries, cancellations, and returns, are costly, and

even more so if the customer service rep is looking into multiple systems with inconsistent data.


Returns and reverse logistics

Key elements of the order management process are

returns and the effective management of reverse

logistics. Return processes are critical to the customer

experience. No matter where the return originated,

the process should be easy and cohesive. Inefficient

reverse logistics can be one of the largest expenses

incurred by a retailer or brand manufacturer. In the

omnichannel environment, handling reverse logistics becomes much more complex, because it requires

multiple return options that may result in inventory returns to different inventory facilities. The OMS must be

able to effectively track items throughout the entire return process and help to automate the return of items

to stock. Visibility into complete transaction history data as well as analytical tools are necessary functions

of the OMS and should provide return rates data, by customer and by product, to enable the retailer to

make better business decisions regarding product quality, product information, or other customer issues.

Delivery and service scheduling

Some products may require delivery and service scheduling in conjunction with the transaction. This process

is typically managed after the order transaction has been placed and often requires manual processes that

are prone to errors and do not always result in an optimal customer experience. The OMS should be able

to link to other service systems to enable the scheduling of a delivery, installation, or other services during

the order process.

Predictive processing/analytics

With complete visibility into all sources of inventory supply, the OMS can predict when disruptions in supply

will impact promised delivery dates. The OMS can then alert the appropriate systems and locate the next

best source of supply. Essentially, it provides the analytics to make better informed business decisions

regarding inventory, merchandise, and marketing.

DID YOU KNOW?

92 percent of retailers allow shoppers to buy

online and return the purchase in-store.

OUR TAKE: Plan for the future

Look for an order management solution that will support your business requirements today, and for the

long term. A good order management system will be flexible and offer configurable business rules that will

allow the system to scale as your business grows.


SPOTLIGHT ON DATA

In today’s retail reality of unified commerce, the role of order management has become more important than ever. At the core, order management is all about data. Good order management systems leverage data from all retail sources to optimize inventory management, expedite orders seamlessly, and ensure timely delivery, while increasing operational efficiencies and reducing costs.

Backed by a retailer’s data, modern OMS platforms leverage Artificial Intelligence (AI) to optimize and automate order management functions. These systems are able to predict which stores will move through higher volumes of products first, what locations to route orders from to get products faster, etc.

When implementing or optimizing an OMS, retailers should identify top data points by asking the following questions:

• What data is core to your business? What data, if known and compared to other data, will reveal actionable insights (e.g., new vs Returning customers - by geo location etc.)

• What data will reveal shipping patterns – location, product types, etc.

• How can relationships among data points identify opportunities

a. Map AOV, Sell-thru, with inventory availability, etc.

b. Capture and analyze on time or missed shipments

• What processes can be optimized?

a. Connect data from disparate systems to generate an end-to-end view of the business

b. OMS data can be aligned with ecommerce platform data to identify correlations

Payments–

The payment experience is a key factor in driving digital customer

loyalty. The experience must be frictionless to reinforce shopper

confidence and minimize the risk of shopping cart abandonment.

With over 40 percent of digital transactions now made on mobile

devices, retailers are increasingly focused on mobile wallet options

to facilitate easier checkouts, and improved conversion rates.59

Payments | 98 © 2019

BURNING QUESTIONS

• What’s next in mobile payments?

• How do I deal with security and fraud?

• Are payment platforms turning into marketing platforms?

The greatest challenge in digital commerce today, besides the ongoing security challenge, is meeting

customer demands for easy, quick, and convenient checkout and payments. A staggering percentage of

cart abandonment occurs because customers feel the checkout process is too long or too complicated.

This sentiment cannot be overlooked.

Payment security concerns still exist among consumers. But, the lack of confidence in the security of digital

transactions has not trumped the convenience and other benefits that ecommerce offers. Many shoppers

have become so dependent on shopping online that the convenience outweighs the concern.

The way in which customers transact is

evolving. Alternatives to credit and debit cards

now account for more than half of ecommerce

volume, with over 140 online payment

methods in use globally today. Digital wallets

offer seamless convenience, by integrating

convenience and security- seamlessly

speeding up checkouts as customers need

only provide credentials vs. entering credit

card information on individual sites.60


The payment landscape can seem overwhelming

and complex for those not familiar with the different

systems and processes required to facilitate online

and mobile transactions. The payment options that

organizations offer can have a significant impact on

customer confidence and sales, as well as brand

image. Therefore, it is important to understand and

carefully assess which payment options to prioritize.

DID YOU KNOW?

Shopping cart abandonment rates exceed 75 percent

on average. Up to 36 percent of consumers drop out

of the checkout process because they are asked to

re-enter their credit card info. Creating a seamless

payment process can help reduce friction in the

checkout process, increasing conversion and revenue.

PAYMENT TOOLS

1. Payment Gateways

2. Mobile Payments

3. Pay Later

4. Loyalty and Marketing

Payments | 99 © 2019

As consumer preferences change, technology companies, ecommerce platforms, and retailers are collaborating

to improve user experience and optimize checkout flows, resulting in new and innovative payment options.

Payment Gateways

A payment gateway is the service that processes credit card payments for online and brick-and-mortar

stores. Payment gateways facilitate the transactions by transferring key information between platform

portals (websites and web-enabled mobile devices) and the processor/bank.

Payment gateways are vital in the ecommerce transaction process, as they authorize the payment between

the retailer and customer. Most digital commerce platforms come with multiple integrations to the major

gateways, and retailers are advised to select a payment gateway that already has an extension to their

chosen platform and mobile payment options.

Mobile Payments

Convenience, control, security, and personalization are key factors for shoppers when it comes to payments.

In order to address this demand, there is increased focus on optimizing the checkout process, both in apps,

on mobile sites and in stores. Strategies include fast and seamless payment and the addition of mobile

wallets to their payment options.

DID YOU KNOW?

Crate and Barrel, Nordstrom, and Whole Foods now accept Bitcoin and three other types of digital money. The

payment option works by leveraging the digital scanners that many big retailers use to accept phone-based

payments from their apps and from digital wallets like Apple Pay. The store cashier will typically be unaware the

customer is paying with crypto, while the merchant receives a real-time payment in the form of their choosing

(crypto or dollars).

OUR TAKE: Close the Gap

Mobile traffic accounts for over 60 percent of online shopping traffic, yet conversion is typically 20

percent lower than on desktops. Bringing this mobile metric to parity with desktop represents a massive

opportunity to drive revenue. Mobile wallets can help close the gap.

Payments | 100 © 2019

Many customers avoid making purchases on their

mobile devices due to security concerns and the

difficulties of entering payment information on a small

touchscreen. Mobile wallets are designed to combat

these concerns by streamlining the mobile payment

process. Mobile wallets allow users to make payments

and transfer money directly from their smartphones,

and most leverage near-field-communication (NFC) for

payments in stores. Most mobile wallets can store credit, debit, gift, and loyalty cards and offer users a fast

way to make payments both in-store and online. Mobile wallets also provide the ability to promote offers

and discounts to the shopper.

DID YOU KNOW?

72 percent of retailers allow customers to

pay with PayPal, 12.6 percent with Amazon

Pay, and 11.9 percent with Apple Pay.61

SEEN IN THE FIELD

The Starbucks app is the most popular

option for mobile proximity payments.

In 2019, 25.7 million people ages 14 and

over will use the Starbucks app to make

a point-of-sale purchase at least once

every six months. The Starbucks app

and mobile payment method has gained

traction because it is closely tied to its

loyalty rewards program – users save

time and money at the register while

earning rewards and special offers.

Proximity Mobile Payment Users, by PlatformUS, 2018, in millions · Source: eMarketer, April 2018

Apple Pay

Google Pay

Samsung Pay

Starbucks Mobile App

22.0

11.1

9.9

23.4

DID YOU KNOW?

The Starbucks app is the most used app for

mobile proximity payments, followed by

Apple Pay, Google Pay and Samsung Pay.62

Payments | 101 © 2019

Pay Later

Pay later options are becoming

increasingly popular with retailers to

facilitate conversions. These solutions

allow customers the flexibility to pay over

a set amount of time for fashion, travel or

home goods. By introducing this payment

option, retailers may convince shoppers,

who are concerned about spending in

the short term, to make a purchase.

Loyalty and Marketing

Retailers are increasingly turning to payment companies to integrate

loyalty features with payment services, either as supplements to

their existing loyalty program or as a stand-alone option.

Payment companies can enable deep category segmentation,

such as discounts with food vendors, through mobile payments

aggregator and geo-targeting service LevelUp or Amazon rewards

for holders of the Amazon Rewards Visa Signature cards.

Mobile Payment Companies as Deal Platforms

Payments innovators, including PayPal, Alipay, TransferWise, and Venmo, are using their reach and

customer loyalty to expand their platform offerings to include retailer deals for consumers.

PayPal users are treated to the same kind of offers (i.e. percent savings or cash-back deals on brand

websites or at brick-and- mortar stores) that have traditionally flooded the inbox of credit card holders.

Payment companies also capture consumer shopping insights and are positioned well to enable cross-sell

and cross- platform opportunities on transactions that include booking, ordering, gifting, and donating.

OUR TAKE: Sharing is caring

The sharing economy will continue to grow via new apps and new adopters. Retailers will look for new ways to

help consumers share the costs of goods beyond traditional channels, like wedding gifts and graduation presents.

Payments | 102 © 2019

SPOTLIGHT ON DATA

When determining payment options, retailers should rely on data to understand customer behaviors and preferences and to pinpoint possible points of frictions in the checkout and payment process.

Shoppers demand fast and easy payment experiences – especially when shopping on mobile devices. Retailers should evaluate data such as the penetration of mobile versus desktop visit and transactions to help close the gap between mobile and desktop conversions.

Specifically, retailers should look at checkout abandonment to determine where in the process they are losing customers. A lengthy and manual checkout process will often result in shoppers abandoning the purchase compared to the option of using Apple Pay, Venmo or Paypal, and completing an order quickly and easily.

Retailers that operate globally should also be looking at sales by country. When building an international business, they need to watch where they get visits but no purchases, as well as where they sell productively. This will help retailers determine what payment options or wallets they should offer. Given the over 140 options in payment types globally, retailers need to make sure they cover key options in specific markets.

Understanding the percentage of checkouts by payment type is also important. This enables retailers to see the shift to new payment methods and whether the shift is adding incremental sales or a shift from traditional cards.

In-Store–

Over the past years, several major retailers have announced store

closings and bankruptcies or declining store sales. While the bulk

of retail sales still come from physical stores, traditional retailers

are feeling the pressure to drive more foot traffic, increase in-store

sales, and encourage customers to return.

In-Store | 104 © 2019

BURNING QUESTIONS

• Is physical retail really dying?

• How can I reinvent the in-Store experience?

• What tools do I need to create more engaging in-store experiences?

Today’s shoppers move between physical

and digital worlds interchangeably – often

interacting with multiple touchpoints and

devices before making an actual purchase. As

a result, expectations of the in-store shopping

experience have shifted. For consumers,

especially younger shoppers, convenience and

experience are front and center when it comes

to shopping. Retailers are forced to face this new

shopping reality head on and take steps to reinvent the in-store shopping experience. The retailers that

come out ahead will be those who innovate by unifying their growing online presence with an experiential

physical environment.

DID YOU KNOW?

Even though ecommerce sales in the US continue

to increase year over year, over 90 percent of all

retail sales transactions still occur in the physical

retail store.63

SEEN IN THE FIELD

Many of today’s most popular

direct-to-consumer, digital native

brands are launching physical

stores, including Casper, Away

and Glossier.

In-Store | 105 © 2019

To meet customer demands, most retailers start by driving traffic to stores from digital channels and

introducing omnichannel retail best practices, such as Buy Online/Return In-Store (BORIS). But these

services are already table stakes (BORIS is already offered by 92 percent of retailers in the FitForCommerce

Omnichannel Retail Index) and are no longer enough to “save” the traditional retailer. All signs point to the

necessity for creating more engaging shopping environments that infuse digital into the physical store.

DRIVING STORE TRAFFIC FROM DIGITAL

OUR TAKE: You’ve got to step up your game

The retail store is not dead. But, you must step up your game to meet the expectations of today’s digitally-savvy

shoppers. That means introducing new digital in-store technologies that bridge online and in-store shopping

experiences and providing better training and tools for store associates.

• Online research

• Digital store coupons

• Emails or text messages

• Online store inventory lookup

• Buy online/pick up in store (BOPIS)

• Mobile and proximity alerts

• Social media mentions

SEEN IN THE FIELD

The acquisition of Modcloth,

Moosejaw, Shoebuy and Bonobos

has provided Walmart with a greater

stake in the digital marketplace,

access to higher-profit categories

and more affluent shoppers. This

strategy, combined with a huge

portfolio of stores as pickup

destinations is designed to meet

shopper expectations of blending

physical and digital shopping.

In-Store | 106 © 2019


Modern technologies can help retailers optimize efficiencies

and bring down operational costs, bring digital into stores, and

empower associates to provide better and more personalized

customer assistance. But, many retailers struggle to identify

where to start, the resources needed, and the technologies to

best support the effort.

Point-of-Sale Solutions (POS)

As the name implies, ‘point-of-sale’ (POS) refers to the time and place of a transaction. Often cloud-based

and allowing for real-time data access and easy integration with other retail platforms in the ecosystem,

modern POS systems offer a wide range of features, including inventory management, customer data

capture, loyalty program management, and employee productivity tracking.

According to recent studies, shoppers’ biggest frustration with shopping in physical retail stores is waiting

in long lines. Yet, retailers have been slow to adopt technologies that allow line busting to make checkout

faster and more convenient for shoppers. Retailers can easily and quickly implement solutions, such as

mobile POS to help them meet these customer demands.

IN-STORE TECHNOLOGIES

1. POS

2. CRM

3. Mobile

4. Sales Enablement/Clienteling

5. Interactive/Digital Signage

OUR TAKE: Weigh the Cost/Benefits

While the right blend of technology can elevate in-store experiences, drive sales and empower store associates,

deploying the latest innovative technology does not necessarily boost the bottom line. Retailers should carefully

weigh the cost/benefits of implementing new in-store technologies and develop pilot programs that allow them

to test before implementing across the entire store footprint.

OUR TAKE: Trust the experts

POS is a system that you would never develop in-house. Produce a formal requirements package that

documents your in-store selling service, management pain points, and business needs. As you search for

software that matches your needs, consider how you want to deploy the POS solution (in-store, hosted, or

SaaS). There are advantages and disadvantages to each deployment model.

In-Store | 107 © 2019

• Self-checkout

• Mobile POS

• Pre-order online

• Scan & Go (Amazon Go)

• Pay in App

REDUCE SHOPPER FRUSTRATION WITH LINE BUSTING

Mobile POS systems (mPOS) leverage mobile devices instead of fixed checkout terminals, allowing store

associates to service shoppers anywhere in the store environment. By providing such mobility to the

associate, retailers can create a more appealing and personal shopping experience – from line busting

(check out on the floor) to saving a sale with endless aisle capabilities – looking up and placing orders for

sold out inventory or inventory only sold at other stores or online.

To further expedite the checkout process, several

big retailers – including Amazon, Walmart, Kroger

and Starbucks - have introduced mobile apps

to accelerate the checkout process by enabling

sales associates to checkout anywhere on the

floor and, in some cases, even enabling customer

self-checkout.

Customer Relationship Management (CRM)

The CRM system is essential to optimizing the in-store experience, as it allows for more personalized services.

By providing access to customer information and purchase history, the individual store and store associates

have a 360-degree view of the customer, which allows them to provide personalized recommendations,

offer special services to VIP customers, and resolve customer service issues.

OUR TAKE: Go 360

If your business is multichannel, consider viewing POS as another order- taking channel. A POS system that

supports the same customer experience (pricing, promotions, products, loyalty, gift cards, order history, etc.) as

your other sales channels reflects the centrality of the customer to your business. Your customer can shop from

you on the web, contact center, or store and receive a consistent and seamless experience.

DID YOU KNOW?

• 73 percent of shoppers want mPOS for

quicker checkout times.64

HEARD IN THE FIELD

“The checkout process is currently the Macy’s single biggest pain point,” Jeff Gennette, CEO, Macy’s, Bank of America Merrill Lynch Global Consumer & Retail Technology Conference in New York City

In-Store | 108 © 2019

Sales Enablement/Clienteling

Store associates play a critical role in the shopping

journey. Yet, most are not empowered to deliver

the level of service that customers expect. They

are simply not equipped with the tools, data, and

training necessary.

Constant access to product information via their

mobile phones, combined with unsatisfactory experiences with store associates, has led shoppers to

prefer to use their own devices over engaging with a store associate. To combat this trend, smart retailers

provide store associates access to better information and mobile clienteling tools, empowering them to

proactively provide better customer experiences.

Beyond mobile POS, the greatest opportunity for enhancing the shopping experience is arming associates

with user-friendly tools that allow them to engage and guide shoppers by using customer data insights,

inventory visibility, and access to merchandising content.

Sales enablement (or clienteling) tools range from basic applications built by the retailer that focus on

one or two services, such as mobile checkout and inventory lookup to highly sophisticated clienteling

platforms that truly empower store associates to bring the store experience to the next level.

Ideally, clienteling tools should integrate with other systems in the ecosystem, such as CRM, the ecommerce

platform, order management, inventory systems, and content management, to enable endless aisle,

cross sells, personalized offers, product information, reviews, and more.

DID YOU KNOW?

• 61 percent of shoppers would rather use a

kiosk than speak with a sales associate.65

OUR TAKE: Don’t let shoppers out-stage you

Shoppers are often better-informed regarding product selection, product details, and promotions than the store

associate. A few bad experiences, and they’ll stop consulting the associate all together. Invest in training and

provide the tools that enable your sales associates to provide exceptional customer service.

DID YOU KNOW?

Only 15 percent of retailers equip their sales associates with mobile devices to assists customers while

browsing the store.66

In-Store | 109 © 2019

Mobile (Shoppers)

The use of mobile by consumers continues to increase – both at home, on-the-go and in-store. Prior to

making an in-store purchase, shoppers typically visit a retailer’s site or app or use a search engine to

research products and brand on their mobile devices. While in the store, shoppers use their mobile device

to find more product info, review, competitive pricing, etc.

Retailers can turn mobile in-store activities into opportunities to reach and engage shoppers by:

• Making it easy to find information via mobile

• Using mobile for loyalty programs

• Delivering relevant offers and content

• Offering options to view and buy out-of-stock items

• Enabling store associates to deliver better and more personalized customer service

• Leveraging new technologies such as in-store beacons to collect real-time customer data

HOW CONSUMERS USE MOBILE IN-STORE

Look up info Compare pricing Check Reviews Get advice from friends

$

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OUR TAKE: Turn mobile into your strongest asset

One of the greatest advantages of mobile is that it bridges online and offline experiences. Mobile can drive traffic

to stores and elevate in-store experiences. Understand how your customers use their mobile devices and build

programs around those habits and behaviors.

In-Store | 110 © 2019

Smart retailers realize that they cannot stop shoppers

from using their smartphones in stores, and therefore,

welcome this behavior by offering free wifi access. This

tactic is paying off. Research shows that customers who

use mobile in stores are more likely to make a purchase

in the store. Yet, according to a recent study, only 39

percent of retailers in the US offer customer wifi in

stores and 22 percent have no plans to implement it.68

Another way to turn shoppers’ use of mobile in stores

into a competitive advantage is to leverage beacons or

location-based sensors to gather data about in-store

shopping behaviors and encourage sales through

proximity-based, triggered messages. Although

location-based technologies show promising results

for personalization and targeted offers, retailers have

not been as quick to adopt these technologies as was originally expected. In a recent study, only 10

percent of retailers stated they had implemented location-based sensor technologies for marketing and

communication and 40 percent had no plans to implement the technology in the near future.

Future expectations from shoppers include the ability to look up size and colors without engaging with a

sales associate, augmented reality features that let them preview products in their homes, and location

features that will provide them with in-store maps based on their digital shopping lists. The technology for

these services already exist. The adoption rate is still low, and the ROI not completely proven, but smart and

proactive retailers are experimenting to find the best approach.

DID YOU KNOW?

• 92 percent of shoppers prefer stores that

offer mobile experiences.67

DID YOU KNOW?

82 percent of smartphone users consult

their phones on purchases they are about

to make in-store and 45 percent read

reviews before making a purchase.69

SEEN IN THE FIELD

Nike Inc. is using its mobile app to remake

and rethink the in-store experience by

letting consumers use the brand’s app

to check out on their smartphones, scan

articles of clothing to be delivered to

dressing rooms and reserve items to

pick up in lockers.The brand launched

the first of its app-integrated Nike

stores in Los Angeles last July and in its

68,000-square-foot, six-floor New York

City flagship store in November.

In-Store | 111 © 2019

Interactive Store Signage, Mirrors, Augmented/Virtual Reality

Some retailers have raised the bar when it

comes to in-store shopping experiences,

experimenting with interactive and

intelligent mirrors, digital pricing, robots,

and virtual reality/augmented reality

applications. Even though it is still too

early to truly gauge the effectiveness

of these innovative features, retailers

should not shy away from bringing

digital signage, touchscreens, kiosks, or

other interactive tools into the store.

Although digital and interactive displays can require robust and integrated technology as well as a significant

hardware investment, retailers that offer these tools are one step closer to providing a more innovative and

differentiated shopping experience.

SEEN IN THE FIELD

Nordstrom is investing heavily in engaging customers with highly experiential store environment. The new

Men’s Store in New York City takes the shopping experience up a notch by blending high tech and service.

The store offers the option to buy online and pick up in-store 24 hours a day, seven days a week. It also

offers reserve online and try in-store, three-hour same-day delivery, personal stylists, digital personal stylists

though Style Board, tailor shops, shoe shining, cell phone charging, a bar and a coffee shop. Nordstrom Local

is a ~2500 square foot “store” that has no merchandise. Instead, Nordstrom Local is used for BOPIS pick up,

returns, tailoring, and other services.

OUR TAKE: Store experiences are not just digital

From niche players like Lululemon and Casper to larger brands and retailers like Nordstrom and Nike, store

formats are shifting, focusing on experiences to drive traffic and engage shoppers. Your stores can be your

greatest differentiators. Understand what your customers value and create experiences that will delight them

while showcasing your expertise.

In-Store | 112 © 2019

Other retailers are slow to adopt even simple signage. In-store signage (both digital and printed) that

provide in-store advertising, promote social media channels, mobile apps, and even a simple ecommerce

URL, are only seen at 44 percent of retailers surveyed by FitForCommerce. That leaves over half of

retailers missing out on the opportunity to promote products, cross-promote channels, and provide

omnichannel services.70

OUR TAKE: The data byproduct

In addition to enabling a more engaging customer experience, digital initiatives in stores allow you to capture

data that is otherwise unavailable. It’s a win/win wherein you can use this newfound data to optimize your store

layout, inventory planning, personalized communications, and tailored offers.

SEEN IN THE FIELD

Target recently launched the Target Beauty Studio, an AR technology tool that is integrated into

select brick-and-mortar stores and on its desktop and mobile site. The feature allows consumers to

virtually experiment with products and shades before making a purchase. As part of the program,

Target also introduced a concierge service that provides advice and product recommendations

from Target representatives through text message or a chat tool on the website.

In-Store | 113 © 2019

SPOTLIGHT ON DATA

Digital commerce has the advantage that everything can be captured, tracked, and analyzed, from a customer’s browsing behavior, to her purchase history and preferences. This is a bit harder to do in-store, but it is just as important. Baseline store analytics range from store traffic counters and customer conversion analysis tools based on sales. More sophisticated tools measure in-store traffic and customer path analysis through sensors, heat-mapping and beacons. Savvy retailers leverage a new breed of in-store analytics that link customers’ online purchase history with their in-store activity, providing deeper customer insights that are fed into the overall system of record. These systems provide a complete 360-view of the customer, regardless of channel, and enable retailers to personalize the entire customer experience.

Smart retailers can also leverage web analytics to improve store performance. Crate & Barrel, for instance, makes sure that store merchant teams have insight into web analytics to better understand what people are searching for and how people look at products from an artistic perspective.

To improve and personalize the in-store experience, retailers can benefit from implementing tools that provide sales associate with access to customer and product data. Real-time data enables them to provide service that truly support the customer’s needs such as finding inventory, promotions, sharing product content and completing a transaction.

Arm associates with insights into:

• Purchase history

• Browsing habits

• Customer preferences

• Inventory across channels

• Merchandising content – style guides, videos, etc.

• In-store sensors to track traffic patterns and shopping behaviors

Fulfillment–

The explosive growth of digital commerce has put a premium

on seamless, fast and affordable fulfillment options. Today’s

omnichannel and global world brings additional layers of

operational and logistical complexities that must be considered

as part of overall fulfillment strategies.

Fulfillment | 115 © 2019

BURNING QUESTIONS

• Should I outsource fulfillment?

• Is it worth it to offer free shipping and free returns?

• What fulfillment opportunities do I have within my existing infrastructure which are not yet leveraged?

Fulfillment is an essential part of digital commerce. The process

involves everything from receiving and storing merchandise,

to adding value to the product (i.e. monograming, filling an

order accurately, shipping in a timely manner, etc.).

Many retailers choose to outsource fulfillment because it takes

up valuable time and resources while requiring a significant

capital investment. Partnering with a fulfillment partner allows

organizations to concentrate on products and marketing. Fierce competition has pushed fulfillment centers

to a level of automation and precision that can (and should) work like clockwork. The right software can

provide 24/7 access and real-time reporting. Inventory levels can be easily tracked, and needs forecasted

including metrics to determine what is working and what is not.


Warehouse Management

The Warehouse Management System (WMS) supports

the day-to-day operations in a warehouse. WMS

solutions enable centralized management of tasks,

such as tracking inventory levels and stock locations.

OUR TAKE: Focus on what you do best

Many retailers initially outsource fulfillment due to the capital investment required, labor costs, physical facility,

lack of expertise, and the required focus on their core competency – the business itself.

DID YOU KNOW?

Nearly 70 percent of Target’s online

orders were fulfilled in stores during

the 2017 holiday season.71

FULFILLMENT TOOLS

1. Warehouse Management System (WMS)

2. Shipping

3. Logistics

4. Cross-border Shipping

5. Returns Management


OUR TAKE: Consider the cloud

As is the case with most digital commerce technologies, cloud-based warehouse management systems are

gaining in popularity, mainly due to lower capital investment, quicker implementation, subscription models, and

automatic upgrades.

Workflow planning is key when implementing a

Warehouse Management System. Inbound workflows

start with receiving the products at the warehouse and

how they are “put away”. Outbound workflows start

with the fulfillment of the product when it is “picked.”

The WMS software should be able to be optimized to a

customer’s current workflow process.

Shipping

Free shipping is for many shoppers a

top consideration when placing orders,

even if it results in slower delivery. To

stay competitive, retailers must focus

on making it easy, fast, and inexpensive

(or free) for customers to receive their

purchases. One study revealed that

for 83 percent of US shoppers free

shipping was the most important factor

when ordering online, and over half

indicated that they had not completed

a purchase because of delivery costs.73

Retailers have taken note, and as a

result, an increasing amount offer

free shipping. To counter the costs of

offering free shipping, some retailers

introduce conditions, such as shipping thresholds (spend $XX for free shipping) or offer it as an incentive

to shoppers in exchange for providing valuable information for future marketing purposes. It is important

to remember that “Free” shipping is essentially a tightly managed shipping strategy, with strong shipper

relationships, smart SLAs, and appropriate shopping incentives.

DID YOU KNOW?

59 percent of retailers in the FitForCommerce

Omnichannel Retail Index offer free shipping if shoppers

make a minimum purchase, and only 13 percent include

threshold messaging on product detail pages (e.g. “Spend

$12 more to get free shipping”).74

DID YOU KNOW?

61 percent of retailers use a warehouse

management system in their warehousing

and distribution environments.72


Instant Gratification

In addition to free shipping, shoppers

increasingly expect one-day or even same-

day delivery options.

Seventy-three percent of retailers in the

FitForCommerce Omnichannel Retail Index

offer Next Day Delivery options, signaling

that it is no longer a competitive differentiator

but rather a must-have. Same-Day Delivery

is slowly gaining traction, led by Amazon,

which significantly raised the bar by offering

the service to Prime members. Same-day

delivery has now become the differentiator

that free shipping once was, however

retailers must carefully evaluate if the

demand justifies the required logistical and

fulfillment investments.

With the increased demand for free shipping,

free returns, and one-day delivery, retailers

must carefully choose a shipper that can

handle such demands while offering the

most competitive pricing. To save costs and

ensure quick delivery, it is also imperative

to optimize distribution workflows to ensure

that shipments originate from the distribution

center closest to the customer.

OUR TAKE: Free shipping is a given

In today’s marketplace, it is simply too easy for your customers to find competitive products elsewhere. It’s

important to understand your competitive landscape and the impact of free shipping on the demographic you

serve. Don’t risk losing a sale because you haven’t joined the majority of retailers that offer free shipping.

DID YOU KNOW?

82 percent of US households have an Amazon Prime

membership.75

DID YOU KNOW?

• 24 percent of shoppers cancelled an order because

of slow delivery estimates

• 54 percent abandoned online shopping baskets

because of delivery costs76


Anytime, Anywhere Fulfillment

As an increasing number of shoppers demand more convenient and faster shopping and delivery options,

it is imperative for retailers to adopt new omnichannel fulfillment methods including Buy-Online/Pick-Up-

In-Store, (BOPIS), ship-from-store, and buy online/return-in-store, to name a few. An increasing number of

retailers, including Ann Taylor, Macy’s, Ace Hardware, Nordstrom, Home Depot and Walgreen’s offer buy

online/pickup in-store options.

The upside to turning physical stores into distribution and delivery hubs is the ability to lower in-stock

inventory, decrease shipping costs, and offer customers faster shipping as well as the option to pick up

their orders for free.

SEEN IN THE FIELD

Reviewing order cancellation rates and related

metrics can reveal opportunities for fulfillment

improvements. During a recent review of a major

retailer’s call center data on fulfillment issues, the

company uncovered that over 50 percent of the calls

were related to order status, order cancellations,

shipping and delivery issues. A deeper dive into the

data, revealed opportunities to improve fulfillment

by increasing communication and more accurately

predicting shipping and delivery dates/times. In

addition, better management of the pick/pack/

ship process revealed opportunities to improve

co-packing to stores, allowing the individual store to

take advantage of bulk shipping rates.

Do you really wish tocancel your order?

YES NO

OUR TAKE: Consider using multiple carriers and algorithms to identify lowest cost shipping

Many retailers only ship via one carrier, as it is easiest to manage. Since each carrier calculates costs differently,

using multiple carriers and selecting the carrier and method to use for each order can help save shipping costs

and reduce transit times for customers. Having multiple shippers may help you offer shipping upgrades with little

additional cost. Leveraging availability and location of inventory can also minimize expenses and maximize return

by minimizing the cost of the last mile.


Before embracing this strategy, retailers should carefully weigh the pros and cons. For instance, in

a warehouse or distribution center, retailers can reduce labor costs by automating tasks such as order

picking. Automation is harder to do in a store location, and although shipping costs may decrease, labor

costs will most likely rise. In addition, most retail stores were not built with order fulfillment in mind and may

therefore not have the infrastructure in place to support ship-from-store practices.

Achieving this goal requires solid planning and mapping stores to the online warehouse, which is

only possible when leveraging fully integrated systems that offer cross-channel capabilities. Order

Management technology can help companies make intelligent fulfillment decisions and orchestrate

orders across channels to better serve customers, optimize the use of inventory, and reduce fulfillment

costs for higher profits.

BENEFITS OF DISTRIBUTING FROM STORES:

• Free customer pickup

• Increase traffic to stores

• Faster product delivery

• Lower shipping costs

• Decrease in-stock inventory

Logistics

Breakthroughs in logistics and shipping technology have allowed for expedited delivery, higher efficiency,

greater accuracy, and lower costs. Retailers and brands have made significant strides in reducing the transit

time to deliver orders to customers. Delivery companies, such as DHL, UPS and FedEx, have expanded their

fleets and added processing centers to meet the demand for ecommerce orders and reduced transit times.

Amazon has even added a fleet of planes and delivery vehicles to supplement any voids left by UPS, FedEx,

and the USPS and are working on new innovative ways to get products to customers faster, at lower costs.

SEEN IN THE FIELD

Target’s online sales jumped 42 percent in the first quarter of 2019. The company credits much of this

growth to its same-day services, such as drive up, buy online/pick up in-store and delivery via Shipt

(acquired by Target in 2017). The retailer offers in-store pickup in every one of its 1,851 locations and

drive-up at more than 1,250 of its stores. These digital-based same-day services were responsible for 25

percent of its overall sales growth in the first quarter.77


Shipping applications integrated into ecommerce and OMS solutions ensure shipping rates are optimized

for package dimensions, location, and delivery commitments. Regional carriers, such as OnTrac, LaserShip

and Pitt Ohio, have become important in digital commerce delivery by providing 7-day-a-week delivery to

residential locations.

FedEx and UPS have made acquisitions of truck brokerage firms and logistics companies that will provide

them with a way to streamline their fleets, reduce lost capital of trucks that are not at capacity, and take

advantage of loading/offloading opportunities. As a result, the logistics industry will see substantial gains in

ground transportation that will lead to faster overall delivery at higher levels of efficiency and lower costs.

In addition to consolidation in the shipping and trucking industries, upstart services such as Lyft and Uber

provide delivery flexibility. In some cases U-Haul vans and trucks not booked for traditional purposes are

used to deliver products the last mile.

The subscription model continues to gain traction among shoppers, which is good news for retailers.

Since logistics rely on predictability and timing, the subscription model leads to the decrease in supply

chain friction. By having insight into how many orders need to be stored and shipped months in advance,

shipping and warehouse companies are able to plan and prepare more efficiently.

Global Fulfillment

Ecommerce has opened the

doors to the global market. The

complexity and high costs of

selling globally relate to fulfillment.

Several of the major shipping and

logistics providers have made

acquisitions the past couple of

years to bolster their capabilities

for shipping small packages

across borders, from the US to

other parts of the world.

OUR TAKE: Don’t overlook order sourcing

A flexible order sourcing strategy can reduce logistics and distribution costs. Order sourcing is often set

up to be fulfilled by the closest geographic location. However, other factors, such as lead time, subsequent

orders, manufacturing costs, backlogs, availability, and reliability of transportation, can influence the best

source for an order.

EFFORT

RIS

K

Cross-bordershipping

Partiallylocalized

Fully localized

THE EXPANSION ROADMAP


There are different distribution approaches for expanding globally. They range from low risk/low reward to

high risk/ high reward and include cross-border shipping, partially localized with third-party global logistics,

and fully-localized operations and distribution. The most popular global strategy leverages a cross-border

partner that aggregates packages in the US and sends them in bulk to various locations throughout the world.

Returns Management

While more and more online retailers offer free returns, the process can be cumbersome for consumers and

expensive for retailers.

Most products that are purchased online, and need to be returned, end up being returned to retail stores

if the retailer has a physical location that is convenient to the customer. Retailers tend to prefer this return

method. In fact, 92 percent of retailers in the FitForCommerce Omnichannel Retail Index offer in-store

returns.79 It allows them to put the returned item directly back on the shelf, and while the customer is in the

store, try to sell them something else.

To better service customers, organizations should strive to make it as easy for customers to ship

unwanted purchases back to the retailer. Even though offering free returns can cut into profits, retailers

weigh the cost of making returns as painless as possible for the customer against potential lost sales due

to customers feeling uneasy about buying online.

OUR TAKE: Crawl, walk, run

Develop a phased approach when expanding to overseas markets to assess demand, determine the best

market entry approach, and minimize risk.

DID YOU KNOW?

74 percent of retailers indexed in the FitForCommerce Omnichannel Retail Index offer international shipping.78

OUR TAKE: Outsource thoughtfully, keep your IT infrastructure strong

Invest wisely after thoroughly vetting international providers. As organizations bring on 3rd-party logistics

providers (3PLs), it often seems convenient to adopt the 3PL’s software and processes. Adapting to local

needs while retaining a highly integrated infrastructure is necessary for success.


Some organizations outsource returns

processing to companies that specialize in

taking back merchandise, and FedEx and UPS

have both invested in return management.

While not all retailers offer free returns due to

costs, there are several new companies that

aim to make returns easier, and at low cost

to the retailer. Some offer physical return

stations in high-traffic areas, such as malls,

while other companies manage the entire process. Depending on an item’s condition, it might go back

to the retailer to be sold again, returned to the vendor for a credit, sold to a liquidator or on a secondary

market like eBay, recycled, or donated.81

SEEN IN THE FIELD

Nike Inc.’s new Nike Fit app feature aims to help shoppers find shoes that fit and, in doing so, reduce the

number of returns it has to process. Using the feature within the Nike app, a shopper can scan her foot using

her smartphone camera. Nike Fit scans and collects 13 data points that map the consumer’s foot and find the

right size, taking shoe style and fit into consideration.

DID YOU KNOW?

70 percent of online shoppers make an extra purchase

when returning an item to a brick-and-mortar store. Only

about 45 percent made an additional purchase when

processing a return online and shipping it themselves.80

OUR TAKE: Free returns are the new free shipping

Free return shipping has, basically, become the new competitive advantage that free shipping once was.

Carefully weigh the benefits and costs associated with a ‘free returns’ policy – free returns may eat into your

profits. But, can you afford losing the sale? Do the math.


REASONS THAT CONSUMERS RETURN PRODUCTS:

OUR TAKE: Returned products are a hassle for you and for your customer

Take steps to prevent returns – by improving services, photography and images, managing the quality of the

fulfillment center to prevent damage to goods while the inventory is still within your control.

SPOTLIGHT ON DATA

To develop a successful fulfillment strategy or assess if an existing fulfillment strategy is working, it is important to first understand the underlying data.

Retailers should look at a wide range of data categories when planning, executing and evaluating their fulfillment approach, including customer, operational and warehouse metrics. More specifically, the data that should be on every retailer’s radar includes:

• On-time Shipping - the ratio of orders that were shipped on or before the requested shipping date versus the total number of orders.

• Order Cycle Time - the average length of time from when a customer places an order until they receive it.

• Internal Order Cycle Time - the average length of time from when an order is taken until it is shipped.

• Perfect Order Percentage - the percentage of orders that move through the fulfillment process with no errors or deviations.

• Order Picking Accuracy - the accuracy of the order-picking process.

Retailers that systematically capture and analyze these metrics, can leverage the insights to significantly optimize fulfillment operations, reduce costs and increase customer satisfaction.

OUR TAKE: AI will become the new standard

Artificial intelligence is starting to have a real impact on many areas of digital commerce and will likely,

in coming years, significantly impact logistical efficiencies by automating processes and enabling more

accurate predictive forecasting.

• 20 percent of products are damaged

• 22 percent of products look different than presented on site

• 23 percent involve a wrong product received

• 35 percent are other reasons, such as the fit of apparel items82

Customer Service–

Customer service is an integral component of the overall shopping

experience – before, during, and after the sale. The customer

service experience greatly impacts customers’ opinions about

your company and their continued loyalty. Customer service is

not just a cost center, but rather an important customer retention

and upselling tool.

Customer Service | 125 © 2019

BURNING QUESTIONS

• How do I create more personalized customer service?

• How do I optimize customer service operations?

• What new tools and channels should I invest in to meet customer expectations?

Regardless of whether they are speaking

with a store associate, consulting online

help on an ecommerce site, chatting via live

chat, resolving issues via email, or talking

on the phone with a customer service

agent, customers expect the experience to

be timely, seamless, personal, and highly

relevant. And most importantly, they expect

a quick resolution to their issue. The experience must feel effortless, regardless of whether it is through

self-service or with the help of an agent. Unfortunately, too often that is not the case. As customer

expectations continue to grow, retailers and brands must consistently optimize their customer service

operations, communications and tools in order to offer superior experiences.

The importance of delivering superior customer care has become even more critical in today’s environment

where consumers increasingly take to social media to share their experiences and voice their concerns.

Customer care teams can take advantage of

this opportunity to offer timely public and

personal responses. When done well, these

interactions can positively influence shopper

decisions.

Smart organizations offer customer service

communication channels that mirror the

preferences of their customers. To address

customer needs, various forms of customer

service interaction should be offered – phone, chat, email, text messaging and social – to provide a

convenient and seamless process. As technology advances and customer habits change, it is essential

that the Customer Service function support all current and future customer communication channels.

DID YOU KNOW?

According to a recent study, 80 percent of shoppers

believe that it takes some or even too much effort to

resolve their customer service issues.83

DID YOU KNOW?

83 percent of consumers are more willing to do

business with a company that offers them multiple

ways to communicate with them.84



In order to provide the highest level of personalized customer

service, retailers must basically have three pillars of customer

service in place:

• Integrated systems

• Actionable data

• Thorough training of customer service agents

Whether leveraging a CRM system or other customer service

management tools, all organizations should provide their customer

service agents access to a complete view of the individual customer.

Regardless of what systems are used, they should be fully integrated with commerce systems and enable

customer service representatives to easily access customer, product, and promotional information.

An effective customer service operation

should be able to recognize why a customer

is reaching out for support and use that data

to detect patterns and trends. This data,

when combined with workforce optimization

software, can enable customer service

leaders to keep a finger on the pulse of the

customer service center operations and make

adjustments in resources as needed. Finally,

customer service representatives should

continuously receive training regarding the use

of systems, ways to address customer issues,

and overall brand and product education.

CUSTOMER SERVICE TOOLS

1. CRM/Customer database

2. Call Centers

3. Self-Help

4. Live Chat

5. AI/Chatbots

6. Social

OUR TAKE: A bad customer experience can lead to a lost customer for life

Customers who feel treated as individuals and with respect are generally more satisfied with their overall

shopping experience, and thus, more inclined to remain loyal. Loyal customers buy more, purchase more

frequently, cost less to serve, and have higher retention rates. Needless to say, loyal customers are very

good for business.

Inte

gra

ted

Sys

tem

s

Act

iona

ble

Dat

a

Trai

ning

PERSONALIZED CUSTOMER SERVICE


Call Centers

Modern call centers have come a long way from simply answering an organization’s inbound customer

service calls. A good call center partner should act as an extension of the organization, and, beyond

answering customer questions, undertake functions such as order taking, cross-selling and up-selling.

The call center should also be able to handle customer care requests and communications via the most

popular customer care channels.

Different age groups use different means to contact Customer Service, and retailers must adapt

accordingly. Consumers are also simultaneously using multiple ways to communicate with Customer Service

organizations, indicating the need to have multiple modes of communication readily available to shoppers.

Despite the increasing number of self-service options, customers still seek live-agent support. Frustration

spikes when customers are unable to reach a live person for support so retailers need to determine the

right mix of live agents and self-service options.

Whether in-house or outsourced, an effective call center system makes all the difference. Often, call centers

are built with suboptimal tool sets that do not empower the customer service representatives (CSRs) to

effectively help customers. Without these tools, CSRs are relegated to being “telephone answerers” with

no capability to help customers. Outsourced call centers require even better tools and oversight to be

effective. Outsourced call centers can easily add CSRs as well as cover all time zones, hours of the day, and

weekends. Internal call centers require multiple shifts to support the same hours and take longer to scale

to meet these extended hours. Thoughtful demand forecasting is critical.

Self-Service Help

People expect 24/7/365 customer service, that is where

self-help comes in handy. Preference for online self-

service grew 25 percent among US shoppers in the past

four years.85

When customers have a question about a product or

have an issue to resolve, they first go to the company’s

OUR TAKE: In-house, domestic or off-shore, outsourcing all have costs, benefits and risks

All require significant management attention. Develop and review quantitative models with your executive

management team based on tracking metrics before undertaking any major effort in this area.


website, not for a customer service phone number but to look for answers. Their second stop is usually

a search engine. Despite the growth of online self-help, two-thirds of US shoppers said they had trouble

finding answers on websites.86 Self-help content should not be buried in a FAQ and it is important to make

sure the content is robust, up-to-date and SEO optimized. Beyond text, video is an extremely useful tool not

only for product showcases and how-tos, but to answer questions regarding usage.

Online/Live Chat

Overall, Live Chat is the most preferred method to communicate with Customer Service by internet users.

It is instant and provides the quickest way to pose a question and receive as response – and as an added

bonus, shoppers can avoid long wait times on the phone.

For retailers, Live Chat is an attractive option, as it is less

costly than phone service, can be easily monitored, and

enables customer service representatives to multitask,

handling more than one chat session/customer

communication session at a time. Some retailers are

even starting to use store associates to support live

chat, particularly for specific product questions.

AI and Chatbots

A recent study revealed that sixty-three percent of Millennial shoppers and nearly fifty percent of Gen

X shoppers are comfortable with non-human customer service interactions.88 Retailers are increasingly

tapping into this opportunity by taking live chat to the next level with AI-powered chatbots. By leveraging

chatbots, retailers can provide 24/7 support while

automating the process and lowering customer

service operations costs.

Chatbots can help with solving simple, quick-

response needs, freeing up more time to customer

service representatives to focus on more complex

issues and high-touch customer interactions. The use

of chatbots has increased in recent years, mostly due to the fact that new technology allows retailers to

easily identify and resolve issues through live chat and messaging services. However, automation and AI

must be implemented with caution. In the world of customer service, human interaction is still king.

DID YOU KNOW?

Online chat has grown 21 percent in the past

four years.87

DID YOU KNOW?

25 percent of US companies leverage

conversational AI for customer service.89


Social Media and Messaging Channels

Social media sites, such as Twitter and

Facebook, have become important customer

service channels and should be key

components of a customer service strategy.

Leveraging social media, retailers and brands establish

designated support accounts on relevant social

channels, allowing customers to direct customer care

questions instead of contacting the retailer. Customers

can check a retailer’s social media accounts to discover

known customer issues before contacting the retailer

directly, saving both the customer and the retailer time

and resources.

Leveraging social media monitoring tools, retailers

should also proactively “listen” to what their customers

share about their brands. Social media monitoring

tools automate the process of searching for mentions

of a brand name or specific keywords. It is important to

collect and analyze customer activity on social media

to understand the kinds of issues that customers

predominantly experience.

With the growing number of shoppers using messenger platforms and the introduction of business

messaging apps such as Apple Business Chat and WhatsApp for Business, more and more retailers are

adopting messenger channels as a means of communication. Messaging platforms allow companies to

connect with customers at a much more personal level, where they are already spending their time.

OUR TAKE: Human interaction still rules

AI is not ready to replace human agents but can

be good for answering basic questions. Consider

AI as your tier 1 agents, and reserve agent

interactions for escalations for more complex

issues that require diagnosis and empathy.

DID YOU KNOW?

63 percent of customers expect companies

to offer support via Social Media and 35

percent prefer to use Social Media for

customer service help.90

DID YOU KNOW?

Over 200 million voice messages are sent

every day on WhatsApp.91


While still not the norm, voice messaging is gaining popularity with consumers. As this means of

communication becomes more prevalent, retailers should evaluate how it will impact their interactions with

customers and how to incorporate voice into their customer service channels.

SPOTLIGHT ON DATA

Data is an essential element of great customer service. When contacting customer service, customers expect that agents will know their names and have insight into past purchases and previous interactions with the company. In order to provide the best customer service experience possible, agents need insight into who the customer is, and how they have previously interacted with the company. In addition, shoppers will contact customer service for information about products and services, and by providing easy access to product data, retailers ensure that customer service reps can better serve the customer. Data can also help significantly improve customer care efficiency. By having insight into key customer service trends, it is possible to optimize operations, analyze requests to improve both product development, what information to leverage for self-service online help, etc. In addition, data fuels AI-powered chatbots which in turn can result in greater operational efficiencies.

Analytics/Reporting–

One of the enormous benefits of digital commerce and marketing

is the ability to easily gather data and track, monitor and analyze

everything related to customers, inventory and acquisition and

retention programs. Used correctly, analytics & reporting tools

enable organizations to evaluate the performance of their overall

business, marketing programs and sales across the entire enterprise.

Analytics/Reporting | 132 © 2019

BURNING QUESTIONS

• How can I monitor business, customer and industry trends?

• What are the drivers that are impacting my business?

• How do I ensure that data insights are actionable?

The most successful retailers understand the power of data and analytics and empower each group within

the organization to access and leverage reporting by function instead of relying solely on data analysts

to analyze the data and report back to each group. While business users should have access to analytics

tools, they still need the support of a shared analyst pool for:

• Trend spotting (a fresh pair of eyes for pattern detection that might have gone unnoticed)

• Trend prioritization (what changes are outside the norm, what are the biggest threats and opportunities)

• Drill-down into trend drivers (determining causality, not just correlation)

ANALYST

MERCHANDISER

MARKETER

SUPPLY CHAIN

IT

CUSTOMER RELATIONS

REPORTS AND GRAPHS

MERCHANDISER MARKETER

SUPPLY CHAIN

IT

CUSTOMER RELATIONS

VS.



Armed with the right analytics tools, retailers gain access to valuable insights for individual tactics, overall

programs and sales across multiple channels and customer touchpoints. Retailers should use these insights

to adjust and improve strategies as well as plan future initiatives to drive optimal growth and improve

operational efficiencies. With a myriad of tools readily available, there is no excuse not to leverage these

insights to improve and grow.

Digital analytics platforms are highly fragmented. Most of the solutions and platforms that retailers leverage

to support their businesses – from the ecommerce platform to social media monitoring tools – include varying

degrees of analytics and reporting capabilities. However, often these disjointed systems do not provide the

complete view of the business that is critical to evaluating performance and planning accordingly. Retailers

should implement an end-to-end reporting

platform or dashboard that allows them to access

all data and measure all activities in one place.

There are generally four types of analytics

that organizations should know and master:

descriptive, diagnostic, predictive analytics and

prescriptive. All are critical for understanding the

business, the return on investment on different

initiatives and for planning future programs to

drive growth.

OUR TAKE: Data-driven decisions rule

Don’t fall into the KPI dashboard trap of just showing daily or weekly data snapshots. Just as data is not

information, analytics is not analysis. The whole point is to identify trends, drivers and insights.

OUR TAKE: Make analytics and reporting a priority

The analytics and reporting platform should be one of your highest priorities - understanding business

performance is instrumental in developing your strategy and decision-making for budget planning, spending

and timing.

DID YOU KNOW?

Only 27 percent of marketing and technology

professionals feel that they have the technologies

and infrastructure in place to support their data

needs. Thirty-nine percent feel that they have the

architecture and infrastructure in place but that it is

not used to its fullest.92


4 TYPES OF ANALYTICS

• Descriptive – what happened or is happening?

• Diagnostic – why is it happening?

• Predictive – what is likely to happen?

• Prescriptive – what to do for optimum results

Customer Relationship Management (CRM)

CRM systems are designed to compile information on customers across different channels and points of

contact between the customer and the company - which could include the company’s website, telephone,

live chat, direct mail, email, retargeting and social media. CRM systems include comprehensive reporting

tools that provide organizations with detailed information on customer demographics, purchase history,

buying preferences and concerns. Some CRM systems also provide the ability to automate various

workflow processes and create customer journeys that can be used to develop highly effective content

and marketing programs.

Campaign and Marketing Management

Campaign and marketing management solutions help retailers deliver campaigns across offline and online

channels and personalize customer experiences. In addition to reducing planning time and time-to-market

for campaigns, these marketing platforms also track and capture data about customers that should be

used to personalize experiences and to inform the overall strategy for optimal results.

SEEN IN THE FIELD

Rebecca Minkoff has integrated its analytics,

retail and ecommerce information into one

business intelligence platform that enables

them to access their data quickly and easily

with the help of Amazon Alexa. Forget waiting

for someone to pull a spreadsheet from the

database. Want to know the most popular item

sold in the last 30 days? Just ask Alexa.93


Business Intelligence (BI)

Designed to retrieve, analyze, transform and report data, BI includes the infrastructure, tools and best

practices that enable access to, and analysis of, data to improve and optimize an organization’s decisions

and performance. BI tools can range from simple spreadsheets to sophisticated data visualization tools that

leverage machine learning and typically provide historical, current and predictive views of business operations.

Big Data: AI to the rescue

Artificial Intelligence and machine learning has been a game changer for big data analytics. The emergence

of advanced analytics solutions allows retailers to examine large data sets to uncover hidden patterns,

unknown correlations, market trends and customer preferences. These platforms leverage machine learning

by ingesting big data from a multitude of complex functions from supply chain to logistics to marketing and

merchandising, and in some cases even product design. Even though these newer platforms make it much

easier for organizations to leverage big data to support their business initiatives, organizations are wise to

hold off investing in one until:

• They understand how to utilize the data

• They know what they want to know and derive from the data

• They have the right organizational capabilities to properly manipulate and understand the data

OUR TAKE: Improve your ROI

Tracking ROI for Pay-Per-Click, advertising, affiliate networks, email campaigns, etc., will show which

initiatives work best and for how long. When calculating ROI, include online sales, returns and post-sale

metrics as they affect long-term ROI. Communicate results with relevant stakeholders so they can help

improve your ROI.

OUR TAKE: Data is the easy part

You already have access to basic customer data such as demographics and order history. In digital

commerce, even more information on the customer is usually available. However, the trick is to ensure that

the data captured is easily accessible, properly maintained and can be presented in an actionable way.


Web Analytics

The analysis and reporting of website data is table

stakes and a must-have for all organizations. Today, web

analytics should also include mobile web, and other

digital platforms and capture both browsing behavior

as well as transactional data. Advanced web analytics

provide insight into visitor and referral data, traffic and

navigation patterns and detailed metrics reports that help

retailers optimize the ecommerce site and other digital

touchpoints. Most digital commerce platforms include

some web analytics functionality, but retailers can benefit

from augmenting these with a robust and comprehensive analytics package that includes:

• Visitor analysis – segmentation using distinct personas, based on traits and site behavior

• Referral analysis – uncovering how visitors came to the site

• Browse patterns – mapping what visitors do on the site

• Attribution by source – understanding how each marketing effort contributes to revenue

It is not necessary to invest in an expensive web analytics platform - even free analytics packages such

as Google Analytics are very robust, however it is critical to ensure that any chosen analytics package is

properly implemented to avoid making costly mistakes due to “bad” data.

Attribution

An attribution model is the rule, or set of rules, that determines how credit for sales and conversions is

assigned to touchpoints in conversion paths. As retailers expand budgets for digital marketing programs,

it is imperative to understand the path-to-purchase and assign the appropriate “credit” to each program.

Many organizations use “last touch attribution” assigning the credit for the sale to the last touchpoint a

customer utilized before converting. Multi-touch attribution looks at the entire sequence “touches” across

the customer journey to conversion. This allows for better allocation between channels and campaigns that

tend to occur earlier in the customer journey versus those that occur later.

OUR TAKE: What’s your version of truth?

Retailers need to be sure that everyone is working with the same version of “the truth”. Analysis based on

incomplete or erroneous data leads to disastrous business decisions.

50%

70%

30%2014 2015 2016 2017


SPOTLIGHT ON DATA

The whole point of analytics and reporting is to transform data into useful information. The keys to achieving that are to:

• Focus on the KPIs most critical to understanding the business situation at hand

• Select the most illuminating trending analysis

When selecting KPIs, begin with the ones that provide the most holistic picture of the health of the business. Then, depending on the picture that emerges from the initial analysis, most will opt to examine secondary (or “drill-down”) KPIs. A perfect example of a holistic KPI in ecommerce is Revenue per Visit (RPV), where up is always good and down is always bad. To understand changes in RPV more deeply, retailers can drill-down to the two components of RPV – Conversion Rate (CR) and Average Order Value (AOV). CR and AOV often move independently, especially during promotions, so focusing exclusively on the secondary KPIs will not provide the accurate business health read-out. But since the basic math always remains CR x AOV = RPV, the actionable insights require the holistic view.

Other frequently used holistic KPIs include new customer acquisition and the cost to acquire each new customer. These apply to any business, not just ecommerce.

Trending (or Comparative) analysis is really where the “understanding” takes form. What is interesting and useful is not the current value of a KPI but how that current value differs from a benchmark value. The classic ecommerce example for this is same-period year-over-year comparisons used to measure growth. Other common comparisons are “us versus them” – how the KPIs stack up against industry benchmarks or specific competitors. A/B split tests are another classic example of comparative analysis used on a daily basis to improve overall performance.

Marketing attribution features are built into most web analytics packages, but some organizations opt

to invest in a centralized attribution platform that pulls data from other marketing sources and integrates

with other technology platforms. They include CRM, the digital commerce platform, marketing automation,

email and other analytical tools.

Conclusion: Coming Full Circle

–This marks the end of this report. But, in today’s retail reality,

there is no end to the story. The “Idea to Doorstep” process

is, like the path-to-purchase, no longer linear, and there is no

clear beginning or end.

After the product arrives at the customer’s doorstep (or desk), the post-

purchase process begins. This is when you find out if all your hard work

has paid off. The data will tell the story. Did you meet your sales goals?

Did you meet or exceed expectations? Did the experience fall short at

any point along the process? If you succeeded, you’ll be rewarded with

a loyal customer who might even turn into your most powerful marketing

asset if you continue to keep her happy. Use what you learn to inform

and optimize your approach going forward.

It is a never-ending process, and just as you think your organization has

mastered the skills to accelerate the business, new technologies will

emerge and turn everything upside down again!

THIS REPORT IS BROUGHT TO YOU BY–

OUR MEDIA SPONSOR–

ChannelAdvisor has been on the front lines of e-commerce since 2001, helping retailers and brands connect

with customers, optimize operations and grow sales channels. We’ve grown from a small company in a

young industry to an industry leader at the forefront of a global revolution — with thousands of clients and

billions of dollars in transactional revenue flowing through our platform every year. For more information,

visit channeladvisor.com

Adweek is the leading source of news and insight serving the brand marketing ecosystem. First published in

1979, Adweek’s award-winning coverage reaches an engaged audience of more than 6 million professionals

across platforms including print, digital, events, podcasts, newsletters, social media and mobile apps. As a

touchstone of the advertising and marketing community, Adweek is an unparalleled resource for leaders

across multiple industries who rely on its content to help them do their job better.

Adweek is part of the Beringer Capital portfolio that also includes BrandShop, a leading full-service partner

that works with major consumer brands to employ digital commerce to increase sales, gain valuable

consumer insight and create the type of end-to-end experiences that build loyalty and keep brands ahead

of the competition. Learn more at adweek.com and brandshop.com

http://channeladvisor.com

http://www.adweek.com

http://www.brandshop.com

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FitForCommerce is a leading boutique consultancy that helps hundreds of online and multichannel brands

and retailers make informed digital, ecommerce and omnichannel retail investment decisions. Leveraging

years of experience, state-of-the-art tools, strategic diligence and tactical planning, FitForCommerce helps

brands and retailers define strategies for growth, improve the customer experience, plan and hire the right

organization, and find "best fit" technology solutions. | www.fitforcommerce.com

Foundation Merchandising Planning/Sourcing Content User Experience

MarketingAcquisition

MarketingRetention

SellingMarketplacesOrder Management

Analytics/ReportingFulfillmentCustomer ServiceIn-StorePayments

DOORSTEP

IDEA

http://www.fitforcommerce.com

Documents

FROM IDEA TO DOORSTEP 2019 · From initial interest through purchase and beyond, organizations need to manage many complex, interdependent and moving parts. While the thought may